Apple stock has 25% upside amid 4 potential catalysts from next week's iPhone 16 reveal, Goldman Sachs says

• Apple's iPhone 16 event next week could boost the stock price, Goldman Sachs said.
• Goldman increased its Apple price target to $276, representing potential upside of 25%.
• Apple's investments in hardware and AI are expected to drive revenue growth in 2025 and 2026, Goldman said.

Apple's upcoming iPhone 16 event could boost the stock price if any "upside surprises" are announced, according to Goldman Sachs.

In a note this week, the bank said the four surprises could drive the stock closer to its $276 price target, which represents potential upside of 25% from Wednesday's close.

That's even though Apple's big iPhone unveil announcements tend to be a "sell the news" event, with the stock underperforming the S&P 500 by an average of 0.70% on its big iPhone announcement days over the past five years.

The four upside surprises include announcing a price increase for the new iPhones, an earlier-than-expected launch date for its Apple Intelligence features and apps, new iPad announcements, and better-than-expected promotions from telecom companies.

An unexpected price increase to the lineup of iPhone 16 models would provide Apple with a direct revenue boost, and according to Goldman, it would be more than warranted based on its continuous innovation in hardware features over the years.

"In our view, AAPL's investments in iPhone hardware and across the Apple ecosystem in recent years have provided consumers with additional value and should help warrant the price increases," Goldman Sachs analyst Michael Ng said.

One way the company can increase the price of its phones is by increasing the storage for the base model from 128 GB to 256 GB.

"We note that the iPhone Pro has not seen a price increase since it was first introduced with the iPhone 11 Pro in September 2019," Ng said.

Goldman ultimately expects Apple's next-generation iPhones to be a hit with consumers as it rolls out AI features.

The bank said it expects the company's iPhone revenue growth to accelerate to 9% in both 2025 and 2026, "catalyzed by AI features and new iPhone hardware form factors."

Part of that growth could be fueled by attractive subsidy programs from telecom carriers like AT&T, Verizon, and T-Mobile, which often try to lure in new customers with heavily discounted iPhones.

Aside from the iPhone 16, Apple is expected to announce a refresh of its Apple Watch lineup, as well the fourth-generation refresh of its popular wireless headphones, AirPods.

Goldman slightly increased its Apple price target to $276 from its prior price target of $275.