Istanbul, Turkey – After a period of neutrality towards Apple Inc. (NASDAQ: AAPL), analysts have decided to upgrade the tech giant’s stock to a buy recommendation. The decision comes on the heels of Apple’s struggle with muted smartphone demand and increased competition in China, evident from its recent quarter results showing a decline in iPhone sales year-over-year. The market response prompted a reevaluation of the stock’s potential, leading to this optimistic change in rating.

One key factor driving this upgrade is the introduction of Apple Intelligence, a new feature announced at the WWDC event designed to enhance iOS 18. Integrating artificial intelligence into Apple’s ecosystem, particularly with the latest lineup of iPhones and iPads, is seen as a strategic move to stimulate an upgrade cycle and boost sales amidst the challenging market conditions.

Since the last upgrade to a hold stance in September 2023, Apple’s performance has aligned with the S&P 500, validating the analysts’ November predictions. Despite initial concerns about macroeconomic headwinds impacting demand, revised expectations and the introduction of Apple Intelligence have reignited optimism for the company’s future.

Industry research points to a temporary slowdown in smartphone demand this year, with expectations of a rebound in 2025. Companies like Micron, TSMC, Skyworks, Qualcomm, and Qorvo, all reliant on Apple as a major customer, have reported weaker sales due to subdued demand in the smartphone market. This trend underscores the challenges faced by Apple but also highlights the potential for a resurgence as market conditions evolve.

Looking ahead, global forecasts indicate a modest growth in smartphone shipments this year, with a more significant recovery anticipated in 2025. The launch of iOS 18, incorporating Apple Intelligence, is expected to give the company a competitive edge and drive sales growth in the second half of 2024 and beyond.

Despite concerns over regulatory hurdles and market competition, analysts believe that Apple’s valuation remains fair and justified given its strategic positioning in the industry. Wall Street sentiment also reflects a positive outlook, with the majority of analysts maintaining buy ratings on the stock. The company’s continued focus on services, coupled with the introduction of Apple Intelligence, is expected to drive growth and bolster investor confidence.

In conclusion, the upgrade to a buy recommendation highlights the potential for Apple to outperform market expectations in the coming years. With a strategic focus on innovation and service expansion, combined with the upcoming launch of Apple Intelligence, the company is poised for growth and success in the evolving tech landscape.