-- Apple (AAPL) remains well positioned for continued growth through 2026 following a "strong" fiscal Q2, driven by a 22% rise in iPhone revenue, a 28% rebound in China sales and gross margins of 49.3%, BofA Securities said in a note Friday.
The company guided for revenue growth of 14% to 17% in fiscal Q3 with gross margins of 47.5% to 48.5% despite memory pricing headwinds and supply constraints, while its installed base of over 2.5 billion devices is expected to support "continued double-digit growth" in services, according to the note.
The brokerage cited multiple tailwinds, including better-than-expected global iPhone demand, resilient margins, the expected launch of an artificial intelligence-enabled Siri in 2026 and an anticipated foldable iPhone later this year, along with a planned leadership transition that could sharpen product focus.
Apple can manage cost pressures through pricing strategies and product mix, while increasing investments in AI supported by its balance sheet, the brokerage said, adding it is raising fiscal 2026 estimates to $468.7 billion in revenue and $8.61 in earnings per share.
BofA Securities reiterated a buy rating on Apple and raised the price target to $330 from $325.
Shares of Apple were up more than 4% in Friday trading.
Price: $282.88, Change: $+11.53, Percent Change: +4.25%