Apple Stock Has 'Near Term Headwinds, Significant Long-Term Opportunity': Analyst Lays Out Bull, Bear Cases For Tech Giant

An Apple Inc AAPL analyst looks at the bear and bull cases for the stock, with items such as new smartphones, tariffs and artificial intelligence weighing on investors’ minds about the future of the tech giant.

"We present a comprehensive summary of the bull/bear debates on Apple. Despite near-term headwinds, we see significant long-term opportunity," Bank of America analyst Wamsi Mohan says.

The analyst maintained a Buy rating with a $235 price target.

The Apple Bear Case: Mohan says there are many items that could be headwinds and increase the bear case for Apple stock, including regulatory, lagging in the artificial intelligence race and gross margins potentially peaking.

"We see tariffs and moving supply chains as additional risks," Mohan said.

The analyst said Apple's supply chain, which is centered in China, has been a source of cost advantages and efficiencies. That could now be under pressure with tariffs on China and other countries.

"The U.S.-China trade tensions and protectionist policies are squeezing Apple in both its major markets."  

One of the top concerns for Apple could be the growing disruption of artificial intelligence, which could bypass traditional smartphone apps or web searches, the analyst said.

"This hints that AI-driven platforms could reduce time spent within the iPhone's ecosystem."

Mohan said Google's AI features could drive consumers away from iPhones to Android devices with Alphabet Inc GOOGGOOGL integrating more AI into its smartphones.

The analyst also said there are concerns for Apple growth past the iPhone.

"Bears question whether Apple has a ‘next big thing' on the horizon that can re-ignite substantial growth, or if the company is now essentially at the maturity stage of its innovation cycle."

Apple revenue was down in 2023 and up only at a low single-digit rate year-over-year in 2024.

"Apple's stock currently trades at a premium valuation that looks increasingly difficult to justify given the company's modest growth profile."

The analyst said the bear case is Apple is trading like a growth stock, but the growth isn't there anymore.

Read Also: Apple Reports ‘Strong’ Q2 Earnings: Revenue Beat, EPS Beat, Installed Base Hits All-Time High Across All Segments, $100 Billion Buyback And More

The Apple Bull Case: While there are several headwinds facing Apple stock, Mohan also sees a bull case maintained thanks to the company's resilient earnings, vertical integration, expanding installed products base, services growth and more.

"Despite various headwinds, Apple's bulls argue that the company's financial performance is remarkably resilient, with a low likelihood of disappointing Street expectations," Mohan said.

The analyst said Apple often has conservative guidance and can provide consistent beats along with margin expansion over time.

While there are concerns about Apple being behind in the AI race, Apple bulls argue that the company is set for dominance for personal and private AI experiences thanks to its devices and strong installed user base.

Mohan said there could be several "significant upgrade cycles" coming for Apple's smartphones including an ultra-thin iPhone in 2025 and a foldable iPhone by 2026.

While Apple's stock could look highly valued to bears, Mohan said the company's forward price-to-earnings has often been in the high-20s to low-30s and is now around 25x to 27x.

"In other words, relative to its own recent history, Apple's current multiple is not stretched; it's reasonable given the low interest rate environment and Apple's superior business quality."

The Analyst Takeaways: While there are headwinds, Mohan maintains a Buy rating and predicts more long-term upside for the stock.

"Apple's risk profile is lower than most companies, which supports a higher multiple," Mohan said.

The analyst said Apple's Services opportunities may not be fully valued in the stock price.

"Apple, while not exactly ‘cheap' remains an investment with many avenues for revenue and margin growth with continued strong free cash flow and shareholder returns."

AAPL Price Action: Apple stock trades at $200.99 at publication on Monday versus a 52-week trading range of $169.21 to $260.09. Apple stock is down 17.5% year-to-date in 2025.

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