Apple upgraded to Outperform from Market Perform at Bernstein

Bernstein upgraded Apple to Outperform from Market Perform with an unchanged price target of $195. The shares have de-rated significantly amid a weak iPhone 15 cycle and fears that Apple’s China business is structurally impaired, the analyst tells investors in a research note. However, the form believes prevailing weakness in China is more cyclical than structural, and notes that historically Apple’s China business has exhibited much higher volatility than Apple overall, given its “very feature-sensitive installed base.” Bernstein believes replacement cycle tailwinds and incremental generative artificial intelligence features set up Apple well for a strong iPhone 16 cycle. Tactically, expectations are low entering the company’s fiscal Q2 results, it adds. The firm tells investors to “buy the fear.”