A price-to-earnings multiple of roughly 35 times projected 2028 profits forms the backbone of Bank of America’s bullish case on Apple (NASDAQ: AAPL).
Analyst Wamsi Mohan pegs Apple’s calendar 2028 earnings per share at $10.32, a figure the bank says justifies its $370 price target given the company’s financial strength and AI positioning.
With Apple shares closing at $338.32 when the note was published, that target represents potential upside of approximately 9.4% for investors buying at current levels.
Mohan reiterated his Buy rating on the stock following a strong fourth quarter, signaling that near-term results have done little to shake the firm’s longer-term conviction.
One cloud on the horizon is rising memory costs, which Bank of America acknowledges could weigh on Apple’s profit margins in the periods ahead.
The bank believes Apple has several levers to pull against that pressure, including savings on non-memory components, inventory purchased at more favorable prices, and selective increases in product pricing.
Those measures are expected to cushion some of the margin decline, though the bank stops short of suggesting they will fully neutralize the headwind.
A central pillar of the bull thesis is a multiyear iPhone upgrade cycle, driven by consumer demand for handsets powerful enough to run generative AI features directly on the device.
Bank of America also expects the company’s Services segment to accelerate over time as Apple develops ways to monetize AI-powered Siri capabilities and draws a larger portion of its installed base into subscription and service offerings.
Taken together, the AI hardware cycle and the Services expansion narrative give the bank confidence that Apple’s premium valuation relative to broader market earnings multiples is sustainable through the end of the decade.
The $370 price target reflects a bet that Apple’s ecosystem lock-in, combined with its positioning at the intersection of consumer hardware and artificial intelligence, will support above-market earnings growth well into 2028.
For investors, the key question is whether the memory cost headwind proves more persistent than Bank of America currently models, or whether Apple’s pricing power proves sufficient to protect margins through a potentially volatile component cost environment.
