Is Apple Stock Headed to $400? 1 Analyst Says Apple Is a "Sleeping Giant" With a Major AI Catalyst.

Wedbush analyst Dan Ives may be best known for his vocal support of Nvidia and Tesla, but on Friday morning, he reminded investors that he is just as bullish on another mega-cap tech name: Apple (NASDAQ: AAPL). In a fresh note, Ives lifted his price target on Apple stock from $350 to $400 -- the highest figure any major firm has set on the iPhone maker. From a recent share price of about $293, that implies upside of nearly 37%.

What has the analyst so bullish? Ives called Apple "the sleeping tech giant about to see a major inflection point in growth" as the company prepares to unveil its long-awaited artificial intelligence (AI) strategy at WWDC 2026 in June.

For investors who have grown impatient with Apple's slow pace on AI, it's a compelling argument. And recent results suggest Cupertino doesn't necessarily need a flashy AI moment to keep its current momentum going. But it would certainly help.

So, is the stock really headed to $400?

The new MacBook Pro powering two external displays.

A Street-high call rooted in AI

The crux of Ives' bullish view is that Apple has the pieces in place to monetize AI in a way no other consumer technology company can. The iPhone maker has more than 2.5 billion active devices in use globally. Ives expects Cupertino to use WWDC to formally lay out a foundational AI platform that lets users plug in different AI models, starting with a deeper partnership built around Alphabet's Google Gemini.

In Ives' view, this approach could ultimately put AI in the hands of roughly a fifth of the world's population through Apple devices and unlock as much as $15 billion in additional annual services revenue from new AI-driven subscriptions and storage tiers. Whether that figure proves right or not, the size of the company's audience does at least make the upside math interesting.

Apple CEO Tim Cook has recently signaled that spending on AI is ramping up meaningfully at the company. When asked during its most recent earnings call about how Apple is investing in a world of agentic AI, Cook pointed out that the company's research and development costs are accelerating at a much faster rate than the company is. In addition, Cook reminded investors in Apple's fiscal second-quarter update that it would bring a more personalized Siri to market this year.

Momentum the bears can't ignore

While the AI catalyst is the upside narrative, it's worth noting that Apple's business is already demonstrating exceptional momentum -- even before a potentially even bigger AI tailwind kicks in.

In its fiscal second quarter of 2026 (the period ended March 28), the iPhone maker reported revenue of more than $111 billion, up 17% year over year and a March quarter record. iPhone revenue rose 22% to $57 billion. And the company's high-margin services revenue reached an all-time high of $31 billion -- up 16% from a year ago. And earnings per share climbed 22%.

Just as important, Apple's business momentum is accelerating. In the prior holiday quarter, fiscal Q1 revenue rose 16% with earnings per share up 19% and services growing 14%. So in this past quarter, every one of those growth rates moved higher.

Also worth calling out, Greater China, long a sore spot for Apple, is also waking up, with revenue in the region up 28% in fiscal Q2.

And this momentum should continue. Management's guidance for the June quarter calls for revenue to grow another 14% to 17%.

The company's recent product releases also lean directly into the AI workload story Ives is buying into. The iPhone 17 lineup added neural accelerators inside the GPU on the new A19 chips, while the M5-powered MacBook Pro, iPad Pro, and Apple Vision Pro feature a Neural Accelerator in each GPU core -- a design Apple says delivers more than four times the peak GPU compute for AI compared to its prior generation. And on its fiscal second-quarter earnings call, Cook described Mac as a leading platform for developers building and running AI on the device, pointing to Apple silicon as a place where some researchers are running models locally rather than in the cloud.

In short, I'm largely on board with Ives' bullishness.

Sure, Apple stock's price-to-earnings ratio sits in the mid-30s, so the stock is by no means cheap. And risks remain, including rising memory costs that Cook flagged in the company's fiscal second-quarter update as a growing margin headwind, alongside the ongoing regulatory and geopolitical pressures that come with being a technology giant with global reach. Investors, of course, should also keep in mind that the company is undergoing a major leadership transition, with Cook set to become executive chairman and John Ternus taking over the CEO role on Sept. 1.

But with growth reaccelerating and AI potentially transforming into an even stronger catalyst for Apple in the coming quarters, Apple could become even more indispensable in an AI era.

Ives may or may not get his $400 12-month price target. Either way, it's getting harder to see the iPhone maker as a sleeping giant. In fact, the giant may no longer be sleeping.

Daniel Sparks has his clients have positions in Apple. Daniel also has clients with positions in Tesla. The Motley Fool has positions in and recommends Apple, Nvidia, and Tesla. The Motley Fool has a disclosure policy.