By Apple stock rose 1.6% on Wednesday after China Renaissance upgraded the shares to Buy from Hold and raised its price target to $425 from $280, citing the growth potential of the company’s first foldable iPhone.
The new target represents 22% upside from Apple’s Tuesday closing price of $348.51.
Analysts Jack Zhou and Lemuel Lin said the iPhone Duo, launched in October, had changed their outlook on the company.
They believe the device could reshape the iPhone replacement cycle and create a new growth platform, helping offset pressures from higher memory costs and slower growth in services.
China Renaissance sees a new growth cycle for Apple
The analysts said their previous Hold rating reflected concerns about memory chip-driven margin pressure and slowing services growth.
However, they now see the foldable device as a potential catalyst for a longer period of expansion.
“We view Duo as a new growth platform with the potential to reshape the iPhone replacement cycle,” Zhou and Lin said in their research note.
They added that the combination of a foldable display, multitasking capabilities and Siri AI could introduce new uses for the iPhone.
The larger screen and side-by-side app experience could support productivity, content consumption and AI-assisted workflows, creating an incentive for existing customers to upgrade, the analysts said.
The initial response to Apple’s first foldable phone has included enthusiasm about its hardware alongside concerns about software limitations and durability.
Some customers have reported that the inner screen can crease or break.
Despite these issues, China Renaissance believes the Duo could create a new decade of growth for Apple by supporting smartphone sales and upgrades.
The firm sees this opportunity as sufficient to offset some of the company’s near-term business pressures.
Memory costs remain a concern for margins
Apple continues to face rising memory costs as demand for chips used in artificial intelligence infrastructure puts pressure on supply and prices.
The company recently projected that its fiscal first-quarter 2027 gross margin would fall sequentially by 1.4 percentage points to between 45% and 46%, excluding tariff refunds.
China Renaissance acknowledged that memory inflation and weaker services growth could weigh on near-term earnings.
However, the analysts said pricing actions and lower costs for non-memory components should provide some relief.
They maintained that the iPhone Duo offered longer-term upside despite these challenges.
Wall Street remains broadly positive on Apple
China Renaissance’s upgrade adds to a generally positive analyst outlook on Apple.
Of the 48 firms tracked by FactSet, the stock has an average Overweight rating, equivalent to Buy, with only four Sell ratings and two Underweight ratings.
Morgan Stanley analyst Erik Woodring also has an Overweight rating, with a $350 price target.
Following Apple’s fiscal fourth-quarter results, he identified slower services growth and potential gross margin pressure as concerns.
However, Woodring argued that Apple’s free cash flow and its reluctance to spend heavily on AI could appeal to investors seeking stability amid uncertainty around the broader AI trade.
“The market is more likely to reward stability and cash flow predictability as it questions the broader AI trade,” he said in a November 3 research note.
Recent checks from other investment banks have offered a mixed picture of demand for the Duo.
UBS said its tracking across more than 30 geographies showed average delivery wait times falling by two days for the Pro and seven days for both the Pro Max and Duo.
JPMorgan, meanwhile, reiterated its Overweight rating on Monday.
Its product availability tracker showed no material change in quoted delivery dates for the Duo, which continued to extend into late January and remained unavailable for in-store pickup.
With only a handful of Sell ratings among 48 firms, Apple remains a staple holding for many investors on top investment platforms.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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