Apple’s AAPL stock reached an all-time intraday high mid-last week, following Wall Street’s renewed confidence in its growth. Wedbush analyst Dan Ives raised his price target for Apple shares to $325, anticipating a “golden era of growth” for the tech giant in 2025, as quoted on Yahoo Finance.

Ives believes Apple is entering a multi-year iPhone upgrade cycle, largely driven by artificial intelligence. “The seeds of Apple Intelligence are now forming, and will transform the Apple consumer growth narrative over the coming years,” Ives wrote, noting that Apple’s AI strategy, though still developing, will be the key to its future.

Apple’s stock touched $260 early on Dec. 26, 2024, marking a record intraday high, before slightly paring gains. The stock rose about 35% in 2024. Apple approached a $4 trillion market cap as it ended 2024 on a high note.

Despite a challenging start to 2024, which included weak iPhone sales, competition in China, and antitrust issues, Apple has recovered. The release of iPhone 16 didn’t immediately boost confidence, but analysts, including Ives, stayed optimistic as more positive iPhone shipment data emerged.

Apple’s AI strategy, bolstered by the addition of ChatGPT and other AI features for its devices, has fueled investor optimism. Shares began climbing in early November after the launch of the new MacBook Pro lineup. Mid-December saw further gains as Apple integrated AI features like ChatGPT into its devices.

Despite recent successes, macroeconomic challenges could create headwinds for Apple. Potential tariffs on China-made products, particularly iPhones, could raise costs. The Fed’s projections for slower interest rate cuts in 2025 also raise concerns about persistent inflation and consumer confidence.

Apple’s next year’s growth rate is expected to be 13.06% versus the underlying Computer – Micro Computers industry’s growth rate of 18.50%. Apple’s expected growth rate even falls short of S&P 500’s growth rate of 18.75%.

Meanwhile, Apple’s valuation is pricey compared to that of the industry. Price/Earnings (trailing 12 months) for the Apple stock is 37.87X versus 18.02X offered by the industry. Price/Book (most recent quarter) for the AAPL stock is 67.84X versus 35.01X possessed by the underlying industry.

Among the Magnificent Seven players, Apple’s P/E (TTM) is higher than Meta META (28.25X), Microsoft MSFT (35.52X), Alphabet GOOGL (25.57X). Shares of Tesla TSLA, NVIDIA NVDA and Amazon AMZN, however, are trading at a premium to Apple shares. It means Apple shares are not too cheap.