Apple Has a New Growth Engine, and It Could Be Huge

Apple (NASDAQ:AAPL | AAPL Price Prediction) is finally showing what a genuine second engine looks like. Services hit a June-quarter record of $30.7 billion, up 12% year over year, and the company enters a new chapter under incoming CEO John Ternus, who officially took the helm on September 1 as Tim Cook moved to executive chairman. Siri AI is rolling out globally across a 2.5 billion active device installed base, and the first foldable iPhone is expected to debut at Apple’s September 9 event. That combination, paired with a still-accelerating iPhone cycle, is the setup our model is pricing in.

Our 24/7 Wall St. price target for Apple is $359.38, versus a current price of $305.26. That implies 17.73% upside over the next 12 months. Our recommendation is buy, and our confidence level is 90%, our highest tier.

From Consolidation to a Fresh Setup

Apple is down 2.2% over the past week and 2.96% over the past month, but still up 12.59% year to date and 31.31% over the past year. The stock sits 6% below its 52-week high of $344.27. On August 12, Jefferies cut its price target, pressuring shares even as underlying fundamentals kept improving.

Q3 FY26 delivered revenue of $109.42 billion, up 16.36% year over year, with EPS of $2.02 versus a $1.89 consensus estimate. That marked the ninth straight quarterly beat. iPhone rose 21.7% to $54.25 billion, Mac jumped 29%, and every geographic segment posted double-digit growth. Services came in at $30.74 billion, a June-quarter record, though slightly below the $31.22 billion analysts had projected. The quarter was also Cook’s last as chief executive, with Ternus officially taking over September 1.

Why Bulls See a Breakout Above $375

The bull thesis rests on Services becoming Apple’s dominant profit engine and Siri AI monetizing across the 2.5 billion active device installed base. Cook flagged iCloud Plus upgrade tiers as the paid on-ramp for heavy Siri AI users, and paid subscriptions have already surpassed 1.5 billion. Services generated a 75.6% gross margin in the quarter, accounting for more than 42% of total gross profit on just 28% of revenue.

Apple Pay also hit a record user count in Q3. Our bull scenario points to $374.64, or 22.73% upside. Bank of America analyst Wamsi Mohan reiterated a Buy rating and a $380 price target after the earnings report, anchoring that call on 37 times his calendar 2027 EPS estimate of $10.32. The September 9 event, where Apple is widely expected to unveil a foldable iPhone alongside the iPhone 18 Pro and Pro Max, adds another potential catalyst the bull case had not fully priced in.

What Could Go Wrong

The clearest near-term risk is memory. Cook called current DRAM pricing a “100-year flood” and said Apple “reluctantly raised prices” on Macs and iPads to offset the squeeze. September quarter guidance calls for gross margin of 47% to 48%, a step down from Q3’s 50.1%, which itself included a roughly 2 percentage-point tariff refund that will not recur. Supply constraints on iPhone, Mac, and iPad are also expected to weigh on September revenue growth.

The bull counter to all of this: gross profit still grew 25.28% year over year in Q3, and R&D spend climbed to $11.73 billion from $8.9 billion a year earlier, funding the Siri AI and foldable roadmap. Leadership continuity is also a factor worth watching. Ternus built the hardware that drives Apple’s largest revenue lines, but investors will be weighing whether his profile as an engineer rather than an operator shifts the company’s strategic tone. Our bear case lands at $311.77.

How Apple Compares to Microsoft and Alphabet

Microsoft (NASDAQ:MSFT) is the cleanest AI-monetization comparison. Copilot plus Azure sit on a subscription base similar to Apple’s Services flywheel, and Microsoft trades at a forward multiple richer than Apple’s current roughly 33x, which suggests our target is not stretched relative to how the market prices durable software cash flows.

Alphabet (NASDAQ:GOOGL) offers a different frame. Apple’s capital expenditure runs around 1.8% of revenue versus Alphabet’s roughly 37.5%. Alphabet trades at a mid-20s forward multiple, cheaper than Apple but with far heavier AI infrastructure spending. Apple’s asset-light AI stance justifies a premium multiple, making our $359.38 target look grounded rather than aggressive.

Apple Price Prediction 2026 to 2030

Our 24/7 Wall St. price target, combined with a buy recommendation and highest-tier confidence, reflects earnings that keep beating, an accelerating Services mix, and Siri AI arriving without hyperscaler-level capex. The setup strengthens if September revenue lands at the top of the 9% to 11% guidance range. Caution is warranted if memory costs push gross margin below 47%. The imminent launch of a foldable iPhone adds optionality that did not exist when this thesis was first built.

Our multi-year model projects the following, assuming Services growth holds and Siri AI monetization ramps.

These projections assume Apple continues executing on Services and Siri AI. Meaningful upside or downside could come from foldable iPhone adoption curves or a sustained memory-cost cycle that holds gross margins below the company’s historical range.

Editor’s note: This update adds the September 1, 2026 CEO transition from Tim Cook to John Ternus (Cook now serves as executive chairman), notes that Apple’s September 9 event is expected to debut the company’s first foldable iPhone, corrects Apple’s current forward P/E to approximately 33x, attributes the Bank of America $380 price target to analyst Wamsi Mohan and his 37x CY2027 EPS methodology, and notes that Q3 Services revenue of $30.74 billion came in slightly below the $31.22 billion analyst consensus.

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