Apple Shuts Down Buy Now, Pay Later Service in the U.S.

Apple (AAPL) is shutting down its Apple Pay Later service, effective immediately, and will instead provide users access to installment loans offered through credit and debit cards and third-party lenders, such as Affirm (AFRM).

The news was first reported late Monday by 9to5Mac. "Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay," an Apple spokesperson told 9to5Mac. As a result, Apple said it will no longer offer its buy now, pay later (BNPL) service in the U.S. 

"Our focus continues to be on providing our users with access to easy, secure and private payment options with Apple Pay, and this solution will enable us to bring flexible payments to more users, in more places across the globe, in collaboration with Apple Pay enabled banks and lenders," an Apple spokesperson added.

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If you currently have an active loan through Apple Pay Later, you will still be able to manage and pay your loan using the Apple Wallet App, an Apple spokesperson told 9to5Mac.

Apple Pay Later rolled out in October 2023 following a limited launch to randomly selected users in March 2023, allowing users to split eligible purchases of between $75 and $1,000 into four equal payments over six weeks – with no fees or interest. 

Is Apple stock a buy, sell or hold?

Wall Street is bullish towards the blue chip stock. According to S&P Global Market Intelligence, the consensus recommendation among the 44 analysts following the stock that it tracks is a Buy.

However, analysts' price targets have struggled to keep up with AAPL's surging share price since its most recent earnings release and WWDC 2024 announcements, which gave investors insight into the company's artificial intelligence (AI) initiatives. Indeed, shares are up more than 23% since Apple's May 2 earnings release and more than 10% since WWDC kicked off on June 10. Currently, the average price target of $205.91 stands at a nearly 4% discount to current levels.

Wedbush is the most bullish on the Dow Jones stock with a Buy rating and a Street-high $275 price target.

"We believe Apple's AI strategy will leverage its golden installed base around personalization and large language models (LLMs) on the phone that should change the growth trajectory of Cupertino and spur an AI driven iPhone upgrade cycle starting with iPhone 16," Wedbush analyst Daniel Ives said in a note following the start of WWDC 2024. 

He adds that "Apple is taking the right path to implement AI across its ecosystem," as well as laying the foundation for a "multi-year AI strategy across the strongest installed base of 2.2 billion iOS devices over the coming years with the Street giving no credit for AAPL's AI monetization."

Wedbush's $275 price target represents implied upside of nearly 30% to current levels.

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