Apple Inc. (AAPL) could see a strong iPhone upgrade cycle as richer U.S. carrier promotions help consumers absorb higher device prices, according to Bank of America analyst Wamsi Mohan.

Mohan reiterated a Buy rating on Apple with a $370 price forecast. The analyst cited capital returns, Apple's potential to emerge as a winner in edge AI and opportunities in new products and markets.

Apple iPhone Carrier Incentives Hit $1,200

Bank of America said U.S. wireless carriers have increased incentives for Apple's latest iPhones.

Maximum trade-in credits for the iPhone 18 Pro Max have climbed to $1,200. That compares with $1,100 for the iPhone 17 Pro Max and $1,000 for the iPhone 16 Pro Max. Mohan said the richer promotions largely offset Apple's higher pricing this year.

The analyst expects a strong iPhone cycle, supported by higher average selling prices and adoption of the iPhone Duo. Apple's Siri AI features could also increase consumer interest in upgrading.

Bank of America noted that current promotions target customers with relatively recent iPhones. Verizon Communications Inc. and AT&T Inc. generally require an iPhone 14 or newer to qualify for the maximum $1,200 credit. T-Mobile U.S. Inc. generally requires an iPhone 15 Pro or newer.

AI, Services Support Bull Case

Mohan's broader bullish thesis rests on a multiyear iPhone upgrade cycle driven partly by the hardware needed for generative AI features. He also expects faster Services growth, margin benefits from Apple's internally developed silicon and continued capital returns.

Bank of America's $370 price forecast is based on 37 times its calendar 2027 earnings estimate of $9.98 per share. The firm believes a premium valuation is warranted by opportunities in agentic AI, a multiyear upgrade cycle, Apple's cash position and potential expansion into new markets.

Risks include a weaker iPhone cycle, slower Services growth, execution challenges around agentic Siri, tariffs and longer smartphone replacement cycles.

Apple Stock Nears 52-Week High

Apple stock rose nearly 1% Thursday as a broad market rally lifted mega-cap technology stocks. The Nasdaq gained 1.66%, while the S&P 500 rose 1.06%.

Apple remains in a strong longer-term uptrend. The stock is trading above its 20-day, 50-day, 100-day and 200-day simple moving averages.

Shares are about 4.4% above the 20-day SMA of $321.32. They are also 17.3% above the 200-day SMA of $286.07. Apple has gained 40.38% over the past 12 months.

Momentum also remains positive. The MACD is above its signal line, while the histogram is positive. That suggests buyers have maintained control of the recent trend.

In addition, the 20-day SMA remains above the 50-day SMA. The 50-day average is also above the 200-day average.

Resistance sits near $344.50, close to Apple's 52-week high of $344.57. Support is around $300.50.

ETF Exposure

Apple is a major holding in several ETFs. The iShares S&P 100 ETF (OEF) has a 9.69% weighting, while the Motley Fool 100 Index ETF (TMFC) has a 9.74% weighting. The VistaShares Target 15 Berkshire Select Income ETF (OMAH) has a 9.97% weighting.

As a result, large inflows or outflows from these funds can translate into additional buying or selling of Apple shares.

AAPL Price Action: Apple shares were up 1.00% at $335.72 at the time of publication on Thursday. The stock is approaching its 52-week high of $344.56, according to market data.