Apple Inc. (AAPL  ) is gearing up to report its fiscal second-quarter (Q2) earnings.

Wall Street expects the Cupertino, California-based company to report $1.51 in EPS and $90.83 billion in revenue on May 2 after the market closes. Until then, Apple analysts are drawing attention to the stock's promising outlook and four key catalysts.

Apple Analyst: BofA Securities analyst Wamsi Mohan reiterated a Buy rating for Apple stock with a price objective of $225, reflecting a potential upside of 36.4%.

The Apple Thesis: Mohan's recommendation to buy Apple stock is grounded on four catalysts, making it a "top pick for 2024":

  1. Re-upping the capital return at earnings in May
  2. Gen AI, or generative artificial intelligence, announcements at the Worldwide Developers' Conference (WWDC) in June,
  3. The launch of iPhone 16 in the fall, and
  4. Re-acceleration in gross profit dollar growth each quarter.
Strong iPhone Upgrade Cycle In FY 2025

Mohan anticipates a strong iPhone upgrade cycle in FY 2025, driven by the demand for cutting-edge hardware to support Gen AI features.

Additionally, there are optimistic expectations for sustained growth in Apple's Services revenue segment.

Mohan also predicts higher margins stemming from the use of internally developed silicon. Moreover, Apple's commitment to continuing its capital return program is seen as a positive factor that could bolster investor sentiment.

AI Features To Increase Institutional Ownership Of Apple Stock

The analyst further suggests that the incorporation of AI features could attract increased institutional ownership of Apple stock.

Expect any legal issues that come up to be manageable, Mohan says.

Key Expectations From Q2 Earnings - New Buyback Authorization In The Cards?

With regard to the Q2 report, Mohan foresees a strong performance overall, but he warns that a lower guidance for F2Q might lead to a pullback in shares.

Despite this caution, Mohan expects Services revenue growth and margins to remain robust, with the anticipation of some Vision Pro sales in the upcoming quarters.

Additionally, investors can look forward to a new buyback authorization during the F2Q earnings call, indicating Apple's commitment to returning capital to shareholders.

AAPL Price Action: Apple stock was trading at $167.13 at the time of publication.