Star technology analyst Dan Ives said that Apple (AAPL.US) could see its valuation rise by roughly $75 per share because of its AI strategy, as the company seeks to use AI to drive device upgrades and increase services revenue.

Ives rates Apple (AAPL.US) shares as Outperform with a $400 price target.

Ives noted in his report: "Apple is entering a new phase in the evolution of its ecosystem, one in which AI tightly integrates hardware, software, and services, not only driving device upgrades and raising average revenue per user, but also leading the next stage of its growth strategy."

Given Apple (AAPL.US)'s massive user base, Ives estimates that AI-related revenue could eventually account for more than 15% of services revenue.

The analyst said Apple (AAPL.US)'s focus on integrating AI into its products while emphasizing privacy and on-device processing could help make the technology part of consumers' daily lives.

He also expects AI to create new opportunities in areas such as health, fitness, finance, and gaming, with developers playing a role in building these services.

Ives expects the iPhone 18 upgrade cycle to support Apple (AAPL.US) over the next few quarters.

He estimates that about 375 million iPhones have not been upgraded in more than four years, creating a large pool of potential buyers.

Ives also expects Apple (AAPL.US)'s foldable iPhone Duo to generate additional demand, estimating sales of about 10 million units over the next few quarters.

Tipranks data show that Wall Street analysts are clearly divided on Apple (AAPL.US): among 31 analysts covering the stock, 16 rate it Buy, 11 rate it Hold, and 4 rate it Sell, with a consensus rating of Moderate Buy and an average price target of $337.51, slightly below the latest closing price.