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Apple’s not just selling shiny rectangles
Bank of America reiterated its Buy rating on Apple, arguing that the real story isn’t just iPhone hype — it’s the company’s services machine quietly doing the heavy lifting. Analyst Wamsi Mohan said Apple’s ecosystem still has room to squeeze out more revenue, especially as AI and new product categories pile on the optionality.
The App Store is still printing, just not loudly
The firm’s checks suggest App Store revenue rose 3.7% year over year in the first 33 days of the quarter to about $3.2 billion. Downloads only climbed 0.7%, which is the corporate version of “same crowd, bigger bill.” Revenue per download ticked up about 3% to $1.01, helped by stronger spending on productivity apps while gaming stayed soft.
AI is the new battleground, and Apple wants in
Mohan also pointed to rising competition in AI-driven search and apps. Alphabet’s search app share of daily active users has slipped, while ChatGPT is still the revenue hog in the App Store, pulling in more than $240 million in monthly revenue in April. Translation: the AI app gold rush is real, and Apple’s platform still gets a cut when everyone shows up to dig.
Why investors should care
Bank of America thinks Apple’s services revenue could grow about 14% in fiscal Q3, and it lifted its price target to $330. That’s not a moonshot call, but it does suggest the Street still sees Apple as more than a hardware cycle story — more like a cash-generating ecosystem with AI as the next shiny add-on.
Big picture: if Apple keeps monetizing its users better while layering AI on top, the bear case has to work a lot harder.