Wall Street's renewed bullishness on Apple stock is all about the iPhone 16

• Wall Street sees Apple's upcoming iPhone 16 setting off a big upgrade cycle.
• Bank of America increased its price objective for Apple stock in a note on Thursday.
• The model's generative AI features will drive demand from consumers, analysts wrote.

Apple's next iPhone is stirring up fresh bullishness on Wall Street.

Bank of America was the latest to raise its price objective on the stock, estimating $256 per share. The target indicates a nearly 12% gain from where the stock was trading around 11:00 a.m. ET on Thursday.

The bank highlighted the next iPhone upgrade as the key to taking Apple stock higher. Excitement for generative artificial intelligence and aging devices currently held by consumers will fuel a multi-year upgrade cycle, it said.

Other analysts are similarly bullish on the upcoming iPhone 16, which is due for release in September.

The phone will be Apple's first device built with AI capabilities in mind, such as a revamped Siri, text summaries, and image generation.

These tools, featured during Apple's WWDC event, will come in the iOS 18 release. The AI system is known "Apple Intelligence," and can only be accessed on Apple models 15 and older.

"Post WWDC, the percentage of respondents answering their intention to upgrade their smartphone in 2024 increased, which we view as bullish," BofA wrote on Thursday, citing a survey it conducted. It added: "In our view, this survey result signals higher confidence in users' purchasing decisions, which could be driven by the introduction of Apple Intelligence."

In a note Thursday, Wedbush Securities estimated that shipments of the new phone would come close to 90 million, exceeding Wall Street's expectations. The firm holds a price target of $275 on the stock.

But the iPhone 16's features aren't the only catalyst — there's pent up demand for a new model, Wedbush said, estimating that 270 million iPhone users have not upgraded their devices in four years.

BofA agreed. In its survey, the bank found that a large percentage of users were still using older models, and saw an uptick of consumers willing to upgrade more frequently. Preference for Apple increased above other smartphone brands.

Meanwhile, the threat of a Chinese consumer pullback — a headwind worrying investors a year ago — is dimming, with buyers in the country also demanding Apple products.

"In China, while there seems to have been a drop in respondents' interest in upgrading to an iPhone (and a corresponding increase in preference for Huawei) for the periods Sep-Oct 2023 and Mar-Apr 24, in both instances, the effect was transitory, and Apple quickly regained share in both periods," the bank said.