Apple to rally more than 20% this year on the next iPhone's new features, Guggenheim says

An employee scans an iPhone 7 smartphone for a customer at an Apple store in San Francisco.
Michael Short | Bloomberg | Getty Images

Investors should buy Apple shares because new innovations on the iPhone 8 will drive better demand, according to Guggenheim, which initiated coverage on the company with a buy rating.

The tech giant's next-generation iPhone could "drive a big new upgrade cycle," analyst Robert Cihra wrote in a note to clients Tuesday. "We believe any hardware changes [on the iPhone 8] have the potential to make an iPhone look 'new' again for the first time in three generations."

More In Pro News and Analysis

CNBC ProHere are Bank of America’s top internet stock picks for the second half
CNBC ProSmall caps have slumped, but Jefferies says these cheap stocks are primed for a comeback
CNBC ProThe bull market will get a $500 billion cash injection by year-end, Goldman says