JP Morgan increased the price target for Apple's stock to $345, insisting that the RAM-driven hardware cost increases won't impact long-term revenue gains.
Late in June, Apple finally gave in and raised the price of many products, in the face of the global memory crisis. In the view of JP Morgan, it's not that big an issue for the company.
In a note to investors seen by AppleInsider on Tuesday, JP Morgan has increased its price target for Apple to $345. This is an increase of $20 from January, when it last raised the stock target price to $325.
The firm acknowledges the hefty price increases are going to be a short-term issue, with investors trying to judge how badly consumers will take the news. But even so, the news isn't enough to dampen JP Morgan's spirits.
Elastic pricing
In its reasoning, JP Morgan first says that the historical data for sales volumes covering iPhone, Mac, and iPad show a "limited relationship" to pricing across multiple years. Essentially, consumers are going to buy Apple products anyway, and pricing doesn't seem to matter too much.
Mac sales are probably the most insulated in JP Morgan's view, with more price point options and AI-led demand working in its favor.
The iPhone also benefits from limited elasticity on the premium end. Those with larger budgets are less affected by price changes, it seems.
That said, the budget end of iPhone and iPad sales is more significantly affected by price. However, even they are considered "modest revenue headwinds" when combined with premium model sales.
While it will be some time before anyone knows how Apple will weather the memory pricing storm, we will get an early indication from Apple's Q3 results, released on July 30.
Since the price hikes, AAPL stock has been doing very well for itself. Following the price hike news on June 25, the company's stock fell to $275.15. It closed on July 6 at $312.66.