Key Takeaways
- Yorkville Ives analyst Dan Ives says Apple will be the “toll collector on the consumer AI highway” and that its AI plans are worth another $75 a share.
- The toll-booth idea holds up, because more than 2.5 billion active Apple devices give the company a cut of consumer AI without it having to build a frontier model.
- Apple already trades at 37x forward earnings, close to its five-year high, and a reported 15% to 20% cut to October iPhone 18 Pro component orders puts the upgrade half of Ives’s case at risk.
- Ives’s $75 looks plausible but stretched, and Apple’s next earnings report will show how weak iPhone 18 Pro demand really is.
Apple (AAPL) has spent years sitting out the race to build the smartest AI model. Dan Ives thinks that’s exactly how it ends up getting paid.
In a note to clients on Thursday, the Yorkville Ives analyst called Apple “a sleeping giant now waking up in the AI race,” and put a number on it on X: “We believe the AI vision and monetization is worth another $75 per share to the Apple valuation.”
His reasoning?
“In our view, Apple will be the toll collector on the consumer AI highway.”
It’s a bold call, especially since Ives himself says the company has “struggled with its AI strategy” for the last few years.
Apple doesn’t have to build the road
“We think the question that matters more is how well the company can put useful AI in front of an installed base of more than 2.5 billion active devices and 1.5 billion iPhones,” Ives wrote.
He’s got company. On Monday’s episode of the Big Technology Podcast, host Alex Kantrowitz said Apple “could win and probably will win AI by default” because it’s built into billions of devices. And on Thursday’s Power On podcast, Bloomberg’s Mark Gurman said “Siri now works exactly as advertised,” even if it’s in “a completely different universe” from ChatGPT and Claude.
For a toll collector, that’s enough. Apple just needs AI to reach people through its devices, the way app developers have paid it a 30% commission for years. Visa (V) takes a cut of billions of purchases it has nothing to do with. Same toll, new road.
The toll already shows up in the margins
Collecting a commission doesn’t cost Apple much, and the margins show it. Gross margin has risen every year for five years, from 41.8% in fiscal 2021 to 46.9% in fiscal 2025…
What $75 a share would take
Here’s the thing: analysts already expect plenty of growth. Consensus has revenue going from $416 billion in fiscal 2025 to $478 billion in fiscal 2026, which ended in September, and then $571 billion by fiscal 2028…
That’s already more than a third of growth in three years. A weak iPhone 18 Pro cycle would hit the fiscal 2027 figure first.
And investors are already paying up. Apple traded at 37.0x forward earnings on Thursday, just under its five-year high of 37.3x in July and well above its 28.8x average…
One way to get to Ives’s $75, which sits more than 20% above Friday’s price, is to work backward from the multiple. At 37x, $75 a share implies about $2 a year in extra earnings per share. Spread across Apple’s roughly 15 billion shares, that comes to about $30 billion of new profit annually, more than the $27.5 billion Apple earned in the entire September quarter of 2025.
Ives sees two ways to get there: AI pushing people to upgrade and a 15% boost to services revenue. The catch is that his math also needs the multiple to stay near its peak. Price the same $2 at Apple’s five-year average P/E, and it’s worth about $58 a share.
The upgrade half is already wobbling
Nikkei Asia (LINK NEEDED) reported on Friday that Apple cut October component orders for the iPhone 18 Pro and Pro Max by 15% to 20% because demand was weaker than expected, and the stock slipped.
The toll itself faces a longer-term risk too. On the Moonshots podcast, Emad Mostaque passed along David Sacks’s view that “the app stores that are taking like 30% are going to be hit hard because you’re just going to talk to your agent and say go find me something or go help me something.”
If an agent does the shopping, the App Store’s cut gets harder to collect. And Kantrowitz pointed to a habit problem with Siri: “You just forget that it’s actually good now.”
A real toll booth at full price
I think Ives has the strategy right. More than 2.5 billion active devices is a toll booth no AI lab can build from scratch.
Where I part ways is the $75. At 37x, the stock already prices in a good chunk of that story. Getting the extra $75 takes about $30 billion of new profit a year, plus a multiple that stays near its peak. Plausible, but stretched, and the upgrades that are supposed to start it off are looking soft.
Of course, Apple’s next earnings report will show how weak iPhone 18 Pro demand really is. Upgrades are the part of Ives’s case that has to show up first.
So what is Apple stock actually worth?
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