With shares of Apple repeatedly setting new 52-week highs, analyst Bill Shope increased his price target from $635 to $720 this week in a note to investors, a copy of which was provided to AppleInsider. He expects big things out of Apple's WWDC next week, where he believes the company will show off groundbreaking advancements to its software offerings.
"While Apple's software-only events have rarely captured the same level of excitement as its hardware launches, we believe this should change," Shope said. "Indeed, with the potential for substantial hardware differentiation and few new hardware categories that can substantially impact Apple's $175 billion revenue base, iOS platform differentiation is becoming increasingly critical."
Potential iOS platform enhancements the analyst anticipates include mobile payments, connected "smart homes," and personal health monitoring methods. He sees those additions as increasing the so-called "stickiness" of Apple's mobile platform, ensuring that users stick with iOS when upgrading to their next smartphone or tablet.
"Overall, while the event will be light on new hardware, we believe the potential for substantial platform enhancements at WWDC and throughout this year should serve as positive catalysts for the stock," he said. Indeed, these platform enhancements, upcoming iPhone and iPad refreshes, and Apple's continued installed base expansion should allow for multiple expansion and upward earnings revisions."
The NASDAQ MarketSite TV studio, via Luiss Villa del Campo.
Goldman Sachs joins a number of other firms who have been prompted to increase their price targets for Apple this week following the company's gains. Earlier Friday, Wells Fargo Securities revised its "valuation range" for shares of AAPL to between $595 and $640, but Apple quickly exceeded the high end of that range as soon as trading began in the morning.
UBS also increased its price target to $700 on Thursday, and told investors that it expects a significant number of user upgrades to take place when Apple releases its anticipated "iPhone 6" later this year. Barclays also upped its price target to $655 on Wednesday, saying that the new number shows "respect" for Apple's momentum headed into the second half of 2014.