How Apple Could Boost Its Revenue by Selling Ads on Apple TV+ and More

Apple (AAPL) shares roseate Wednesday arsenic Needham analysts raised their value target for nan stock, contrasting nan company's share buyback programme pinch competitors' accrued spending and highlighting nan iPhone maker's imaginable to summation from trading ads connected Apple TV+, nan App Store, and more.

Needham analysts lifted their price target for nan banal to $260 from $220. Shares of Apple vanished adjacent to 2% higher astatine $232.98 Wednesday, contributing to nan stock's summation of about 21% since nan commencement of nan year.

Apple Adds Shareholder Value With $110 Billion Buyback arsenic Peers Raise Spending connected AI

In raising their value target for Apple stock, Needham analysts cited really nan iPhone shaper is adding worth for investors done its $110 cardinal stock buyback program, which group a grounds arsenic the largest banal buyback program successful caller history, beating nan erstwhile grounds besides held by Apple.

They noted nan buyback comes arsenic galore different tech giants are increasing superior expenditures to put successful artificial intelligence (AI), raising concerns astir AI's costs. Big tech companies, including Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN), are group to walk much than $1 trillion connected AI successful nan adjacent 5 years, according to Goldman Sachs.

Selling More Ads Could Unlock New Growth for Apple

Needham analysts besides suggested advertizing could correspond a awesome maturation opportunity for Apple, pointing to Amazon's (AMZN) multibillion-dollar advertizing business.

Selling ads connected AppleTV+ unsocial could double Apple's gross maturation complaint successful fiscal 2024, they said. Bringing ads to Apple's App Store could accelerate maturation further.

The analysts said they "can't deliberation of different gross watercourse that AAPL could prosecute that is larger and much profitable" than advertizing would be, particularly fixed nan precocious margin rates associated pinch ads.