Economic uncertainty and tariff-related concerns weighed on Apple last year.
However, the iPhone has returned to growth, with the company gaining market share at the expense of rivals.
A combination of factors could help Apple join the $5 trillion club.
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undeniable apple(NASDAQ:AAPL) has been a long-term winner for investors, with shares up 78,390% as of this writing since its IPO. Over the past few years, however, the iPhone maker has struggled. The combination of economic uncertainty and on-again, off-again tariffs has taken its toll, with Apple shares up just 40% over the past two years, lagging U.S. stocks’ 46% gain. S&P 500 Index.
However, things are starting to look up. The recent developments could help boost the flagging stock and help Apple regain its former glory.
Wedbush Securities’ Dan Ives recently issued a new Wall Street-high price target of $350, which would represent a potential gain for investors of 35% from Friday’s closing price, which would push Apple’s market value to $5.17 trillion. The veteran technology analyst lists four catalysts that could propel the iPhone maker to new heights in 2026.
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While the artificial intelligence (AI) revolution is well underway, Apple has largely been left out of the discussion. Because of its walled gardens and focus on user privacy, Apple faces challenges in collecting the data needed to power artificial intelligence. Apple is rumored to be finalizing a deal with Apple letter Use Google Gemini as the basis for its own large language model. Ives called Apple’s “stealth AI strategy” the “elephant in the room” and suggested that a collaboration between the two tech giants would be a necessary first step in fueling Apple’s rise.
Ives’ prediction came true when Apple announced the partnership on Monday, saying: “Google’s technology provides the strongest foundation for Apple’s foundational model, and we are excited about the innovative experiences it will bring to our users.”
Ives said that Apple has more than 2.4 billion active iOS devices, including more than 1.5 million iPhones, and has “the largest consumer installed base in the world.” This provides a fixed audience and target market for Apple’s artificial intelligence products and services.
Users have long belittled the current state of Apple’s voice assistant, Siri. While Siri’s conversational artificial intelligence was groundbreaking when it was added to the iPhone in 2010, upgrades have been slow in recent years and rival products have outpaced the digital darling.
Ives also predicted that Siri would get a much-needed makeover, and his prediction proved prescient. As part of its partnership with Google, Apple said Gemini will “help enhance Apple smart features, including a more personalized Siri launching this year.”
Since the release of ChatGPT in late 2022, chatbots and voice assistants have exploded in popularity. The long-awaited upgrade to Siri could be a catalyst for future growth.
The above-mentioned economic uncertainty has led to a decline in iPhone sales in recent years. Apple’s revenue fell 3% in fiscal 2023, while growth will be anemic 2% in 2024. However, things improved in 2025, with sales up more than 6%, with strong iPhone sales and services revenue hitting a record high, driving record revenue growth.
Ives believes Wall Street is underestimating iPhone sales growth in 2026, which he expects will be driven by continued iPhone 17 sales and a successful transition to iPhone 18. Analysts highlighted strong demand in China and expected average selling prices (ASPs) to rise for next-generation devices.
The evidence shows that Ives was correct. The price of the iPhone 17, launched late last year, increased by $100, from $999 to $1,099. Therefore, it is not unreasonable to suspect that the iPhone 18 will see a similar price increase when it is released in September.
Rumors have circulated in recent months that Apple CEO Tim Cook may be planning to step down as he approaches “typical” retirement age. In addition, recent changes in the company’s executive ranks and subsequent updates to Apple’s succession plan have also fueled this speculation.
Ives dismissed the comments as nonsense and predicted that Cook would remain CEO “until at least the end of 2027.” He pointed to the recent hiring of prominent AI researcher Amar Subramanya as evidence of Cook’s passion for ensuring Apple’s AI legacy and downplayed talk of his imminent retirement.
To be clear, no one knows for sure what’s going on in Cook’s mind, although reports suggest he’s looking to reduce his workload. That said, speculation about his possible retirement is just that and should be taken with a grain of salt until we hear something else from Cook himself.
Apple’s business trajectory suggests a $5 trillion market cap may not be far off:
At the end of last year, an estimated 315 million active iPhones had not been upgraded in more than four years, setting the stage for a strong upgrade cycle.
Data from Counterpoint Research shows that although the global smartphone market will only grow by 2% in 2025, iPhone shipments will increase by 10%. Meanwhile, Apple holds 20% of the market, up from 18% in 2024.
These represent a trio of ways Apple is increasing revenue, helping it hit $5 trillion in revenue. The price-to-earnings ratio for next year is only 28 times, and this price is appropriate.
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Danny Vena, CPA, has worked at Alphabet and Apple. The Motley Fool owns and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.
One Wall Street analyst says there are 4 catalysts for this unstoppable stock that could propel it into the $5 trillion club by 2026. Originally posted by The Motley Fool
