Despite the ongoing global memory chip shortage, Apple Inc. (NASDAQ:AAPL) stock could see a rise, propelled by the imminent launch of Apple Intelligence, said a Bernstein analyst.

Senior Technology analyst, Mark Newman, suggested that the escalating memory costs, which could potentially reduce Apple’s margins by 1.5 percentage points by the end of the year, should not overshadow the potential of the upcoming Apple Intelligence launch, MarketWatch reported on Tuesday.

The analyst said investors focusing on rising memory chip costs are overlooking the broader outlook for Apple.

He expects component costs for the next iPhone to rise by about 15% this year, resulting in a 12% surge in the overall average selling price. Despite these factors, Newman has raised his price target on Apple’s stock to $340 from $325, asserting that “the bigger story will be Apple Intelligence / Siri 2.0 coming sometime this year.”

Newman emphasized that the collaboration with Google (NASDAQ:GOOGL) (NASDAQ: