Mizuho Analysts Optimistic about Apple Stock

Mizuho desk analysts have expressed a favorable outlook on Apple (NASDAQ:AAPL) stock, considering it an attractive long-term investment despite prevailing negative sentiment regarding iPhone unit declines. They believe such concerns are already priced in, projecting stable fiscal 2025 iPhone sales, particularly for the upcoming iPhone 16, with estimates showing a flat to low single-digit decline year-over-year.

The analysts anticipate a rebound for Apple stock post-March 2025, driven by the June iOS review and the anticipated AI-enhanced iPhone 17 launch in September 2025. They noted, “Patience will be rewarded; near-term downside risk is limited due to overwhelming short positions.”

Production Forecasts

Mizuho now predicts a 6% decline in iPhone unit production for 2024, revising estimates to 220 million units for the iPhone 16. However, they foresee an 8% increase in unit sales in 2025, estimating 239 million units with the introduction of new models like the iPhone SE and iPhone 17. For 2026, they suggest iPhone sales could reach 250 million units.

Analysts estimate the iPhone 17 will sell 97 million units in 2025, marking a 10% increase over the revised iPhone 16 forecast. This sales growth could positively impact DRAM manufacturers, such as Micron Technology (NASDAQ:MU), as the new models are expected to have significant DRAM upgrades.

Internal Modem Transition and Foldable iPhone

Mizuho analysts predict that Apple will start integrating its own modem chips with the iPhone 18, moving away from Qualcomm (NASDAQ:QCOM). This transition is expected to be completed across all models by the iPhone 18 launch.

Additionally, a foldable iPhone is anticipated to hit the market in 2027, driving further investment in G6 OLED panels. New AI features in iOS could further refresh upgrade cycles beginning with the iPhone 17.

Market Sentiment

Despite the unfavorable sentiment towards AAPL and the iPhone supply chain, Mizuho analysts argue that the overly negative buyside expectations may be misplaced. Negative growth predictions for iPhone units in calendar year 2025 contrast with sell-side consensus projecting growth.

In another report, Mizuho Asia analysts highlighted Apple’s focus on AI services and key components like sensors and DRAM, anticipating a downturn in DRAM prices by early 2025 to lower supply chain costs. Future developments include in-house modems in 2025 and foldable OLEDs by 2027. They emphasized the need to evaluate the full value of AI service enhancements in the coming years.