Bank of America is standing by its bullish outlook on Apple (AAPL) after new data showed a 12% year-over-year increase in App Store revenue for June. Top-rated analyst Wamsi Mohan reiterated his Buy rating on the stock, keeping the price target unchanged at $235.
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Apple’s App Store Revenue Climbs
Bank of America stated that Apple’s App Store made $8.4 billion in revenue during its fiscal third quarter, up 11.5% from the same time last year. While app downloads rose by just 4.3% to 8.6 billion, the amount of money made per download increased by nearly 7% to $0.98.
In June, App Store downloads rose by just 3%, while revenue grew 12%, indicating that users are spending more per app. Interestingly, the growth was driven largely by non-gaming categories, reflecting a shift in user spending habits away from mobile games and toward other apps. Although gaming remains the biggest category, it now makes up only 45% of total App Store revenue, down from over 50% in past years.
Mohan said the growth in non-gaming apps is a good sign for Apple’s overall services business, showing momentum outside its dominant gaming category.
BofA Cites More Reasons to Back Apple’s Growth
Furthermore, Mohan highlighted Apple’s strong track record of returning capital to shareholders and its strategic advantage in leveraging AI. While there were concerns surrounding the Epic Games ruling, App Store revenue appears largely unaffected.
Lastly, Mohan said he’s confident in Apple’s earnings, backed by an expected 12% rise in services revenue compared to last year.
Is AAPL Stock a Buy?
On TipRanks, AAPL stock has a consensus Moderate Buy rating among 27 Wall Street analysts. That rating is based on 15 Buys, 10 Hold, and two Sells assigned in the last three months. The average AAPL price target of $226.36 implies a 6.5% upside from current levels.
Year-to-date, AAPL stock has declined by 15%.
