Apple stock received a major bullish call on August 17 as Rothschild & Co Redburn upgraded AAPL to Buy from Neutral and lifted its price target to $400 from $260, pointing to a stronger product cycle, a possible foldable iPhone and improving artificial-intelligence strategy. With Apple shares trading near $303 on Monday, the new target implies roughly 30% upside even after a strong run in 2026.
The call lands at a critical moment. Apple has returned to double-digit revenue growth, Services continues expanding, and its installed device base gives the company an enormous platform for monetizing new AI features. Yet investors are also confronting supply constraints, a premium valuation and unanswered questions about whether Apple can turn its long-awaited AI push into another genuine upgrade cycle.
Why Rothschild Just Upgraded Apple Stock
Rothschild & Co Redburn analyst Timm Schulze-Melander upgraded Apple to Buy from Neutral and raised the firm’s Apple price target to $400 from $260. The thesis centers on a combination of product strength, Services growth and the potential for Apple to make a bigger strategic move in artificial intelligence.
That $140 increase in the target is unusually large for a company already valued at roughly $4.46 trillion. At around $303 per share on August 17, Apple trades at approximately 34.8 times reported earnings, meaning investors are already paying a premium for the stability and profitability of its ecosystem.
Rothschild’s argument is that the next phase could justify an even higher valuation.
The firm points to Apple’s approximately 2.55 billion-device installed base, its highly profitable Services operation and the possibility that a premium foldable iPhone creates a new high-end category rather than merely replacing existing iPhone sales.
For AAPL investors, that is the key distinction.
Apple does not necessarily need explosive unit growth if it can push average selling prices higher, monetize more services per device and convince existing customers to upgrade faster.
A Foldable iPhone Could Become Apple’s Biggest Hardware Catalyst
The most visible part of the bull case is Apple’s expected entry into foldable smartphones.
Reuters reported in January that Apple planned to prioritize premium iPhone models during the second half of 2026, including its first foldable iPhone, while shifting the standard iPhone 18 into the first half of 2027. The strategy would put the company’s highest-margin devices at the center of its fall launch cycle.
Earlier supply-chain reporting also suggested Apple was exploring trial production of foldable iPhones in Taiwan with the goal of mass production in India. The company was reportedly targeting approximately 95 million units across its next-generation iPhone lineup, more than 10% above the prior year’s target.
Rothschild reportedly expects the premium foldable model—often referred to unofficially as the iPhone Ultra—to sell for around $2,199 and reach approximately 14 million units by fiscal 2027.
If those assumptions prove correct, the financial impact could be significant.
Fourteen million units at a price above $2,000 would represent tens of billions of dollars in gross device sales before considering trade-ins, carrier subsidies or product mix.
More importantly, a foldable iPhone could raise the upper boundary of what consumers are willing to pay for an Apple handset.
That could support average selling prices across the broader lineup.
Apple Stock Is Also Becoming an AI Bet
Hardware alone does not explain Rothschild’s enthusiasm.
Apple’s AI strategy has evolved rapidly after years of criticism that the company was falling behind Microsoft, Alphabet and other technology leaders.
In January, Apple and Google confirmed a multi-year collaboration under which the next generation of Apple’s foundation models would use Google’s Gemini models and cloud technology. The companies said those models would help power future Apple Intelligence features, including a more personalized Siri.
That agreement changed the investment debate.
Instead of requiring Apple to spend hundreds of billions of dollars attempting to reproduce every layer of the generative-AI stack internally, the company can use third-party foundation models while concentrating on devices, custom silicon, privacy and integration.
Apple has also signaled that larger AI workloads will run through cloud infrastructure using Nvidia chips, while much personal data processing will continue on-device or through Apple’s privacy-focused cloud architecture.
Rothschild sees an additional possibility.
The analysts argued that a deeper relationship with Nvidia could strengthen Apple’s AI position and potentially reduce its dependence on Google. MarketWatch reported that the firm’s bull scenario could support a $400 share price if Apple further improves its AI strategy through such a partnership.
There is no confirmed broader Apple-Nvidia AI agreement of that kind today.
Investors should therefore treat that part of the thesis as a scenario rather than a verified corporate plan.
Apple’s Latest Earnings Give Bulls Real Evidence
The bullish argument is not relying solely on future products.
Apple’s fiscal third-quarter 2026 results showed substantial momentum in the existing business.
Revenue for the quarter ended June 27 reached $109.4 billion, up 16% from the previous year. Diluted earnings per share increased 29% to $2.02, while gross margin reached 50.1%.
Apple generated $78.7 billion of quarterly product sales and $30.7 billion from Services. Services revenue increased from $27.4 billion in the comparable quarter a year earlier, according to Apple’s financial statements.
That Services number is especially important for Apple stock.
Hardware sales can fluctuate with individual product cycles, but subscriptions, cloud services, payments, advertising, warranties and digital content can generate recurring revenue across Apple’s installed base.
The result is a business mix that can support higher margins and reduce Apple’s dependence on selling ever-larger numbers of iPhones.
Fiscal 2026 has already delivered several major records.
Apple reported first-quarter revenue of $143.8 billion, up 16% year over year, with both iPhone revenue and Services revenue reaching all-time highs.
The company then produced $111.2 billion of revenue in fiscal Q2, representing another 17% annual increase.
Those figures make the latest analyst optimism easier to understand.
Apple is not attempting to restart growth from a shrinking revenue base. It is trying to layer an AI and premium-device cycle onto a business already expanding at double-digit rates.
The $400 Apple Price Target Still Demands a Lot
There is a major problem with the bullish thesis: valuation.
At about $303 per share, Apple already carries a market capitalization near $4.46 trillion and trades at almost 35 times earnings.
A move to $400 would push Apple’s equity value dramatically higher unless share repurchases reduce the share count substantially.
That means the market would likely need evidence that current growth can persist.
Investors would also need confidence that Apple’s premium pricing survives increasing component costs and that its AI investments translate into measurable upgrades, Services spending or device demand.
Wall Street does not agree on that outcome.
Jefferies recently downgraded Apple to Underperform and lowered its price target to roughly $264, according to reports published earlier in August. The firm’s concerns included reports that Apple abandoned a planned all-glass anniversary iPhone and may struggle to offset rising component costs through premium pricing.
The gap between approximately $264 and Rothschild’s $400 target shows just how divided analysts have become.
One side sees a powerful premium product cycle.
The other sees expectations that may be running faster than Apple’s ability to create genuinely new hardware demand.
Supply Constraints Could Become the Next Risk for AAPL Stock
Apple also faces an operational issue that investors cannot ignore.
Advanced semiconductor capacity remains tight, and shortages can become especially damaging when a company is attempting to launch multiple premium products simultaneously.
A split iPhone launch could help Apple prioritize scarce components for higher-margin Pro and foldable devices. Reuters‘ January report indicated precisely that strategy, with premium models arriving first and the standard iPhone 18 shifting into 2027.
That approach could protect profitability.
But it also raises execution risk.
If the foldable iPhone launches with limited availability or Apple cannot secure enough advanced processors, memory and display components, the company could miss a potentially important upgrade window.
Investors therefore need to watch not only demand but supply.
A blockbuster product means much less financially if Apple cannot manufacture enough units.
Services Could Be the Quiet Reason Apple Stock Keeps Winning
The foldable iPhone will generate headlines.
Services may generate more predictable value.
Apple reported $30.7 billion in quarterly Services revenue in fiscal Q3, up roughly 12% from a year earlier.
Every additional active device expands the addressable base for iCloud, App Store spending, AppleCare, payments, subscriptions and other recurring products.
AI could potentially make that ecosystem more valuable.
If a more capable Siri increases engagement across apps, commerce and Apple’s operating systems, the company may be able to monetize artificial intelligence without charging consumers separately for every AI feature.
That is particularly relevant to Apple’s economics.
Unlike pure AI model providers, Apple controls the hardware, operating system, silicon and customer relationship.
The company does not have to win the foundation-model race outright if it can make third-party and internally developed AI technologies more useful inside its ecosystem.
Is Apple Stock a Buy After the Rothschild Upgrade?
The latest upgrade strengthens the bull case, but it does not make the investment straightforward.
Rothschild’s $400 target implies substantial upside from today’s price and rests on several credible drivers: continued Services growth, a huge installed base, a premium foldable iPhone and a more pragmatic AI strategy.
Apple’s recent financial performance also supports the argument.
Revenue is growing at double-digit rates, earnings growth has been stronger than sales growth, and Services is now generating more than $30 billion per quarter.
The risk is that investors are already paying heavily for those advantages.
At almost 35 times earnings, Apple does not have much room for an ordinary product cycle.
The market wants something bigger.
Outlook: The Next Apple Event Could Decide the AAPL Stock Forecast
The next major test for Apple stock will be its coming product launches.
Investors will be looking for confirmation of the foldable iPhone, its pricing, production availability and whether Apple can convince consumers that the device represents a genuine new category rather than an expensive niche experiment.
AI will matter just as much.
Progress on the Gemini-powered Siri overhaul could provide evidence that Apple has finally turned artificial intelligence from a competitive weakness into an ecosystem advantage.
For now, the battle lines are clear.
Rothschild sees enough product and AI momentum to justify $400 Apple stock. Jefferies sees enough product risk to value the shares closer to $264.
One of those views is going to look dramatically smarter after Apple’s next product cycle—and with trillions of dollars of market value hanging in the balance, investors will not have to wait long for the first clues.
