Apple broadens its appeal with Wall Street

It was a successful, but busy, week for Apple as several analysts upgraded their price outlook on the Cupertino-based tech giant's stock.

On Friday morning, analysts at Goldman Sachs led by Bill Shope reiterated their "buy" rating on the stock but upped their price target.

"We are raising our 12-month target price to $720 from $635, " he wrote in a research note. Apple shares finished at $635 on Thursday at the close after adding 1.82 percent during the session. Meanwhile, Manhattan-based analyst Stuart Jeffrey at Nomura maintained his "neutral" rating but upgraded his target price to $621 from a rather lowly $574.

Its average target price now stands at $650, according to Reuters data, with 35 out of 54 analysts having either a "strong buy" or a "buy" rating on the stock.

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Apple announced Wednesday it is to acquire headphone maker Beats Electronics for $3 billion. The deal is expected to close in the fiscal fourth quarter. The brand - founded by rapper and producer Andre Young (aka Dr. Dre) and music mogul Jimmy Iovine - has also recently entered the streaming music business—placing it in head-to-head competition with much larger veteran rivals Pandora and Spotify.

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Nonetheless, many market watchers are eagerly pushing Apple to release another piece of hardware to drive earnings – just as it did with the iPod, the iPhone and iPad. However, Goldman Sachs believes that this could be missing the point.

"The 'next big thing' isn't hardware," it wrote in the note. "The differentiation between Apple's iOS platform relative to Android has far more profound implications for long-term shareholder value creation than whether any given product cycle is a hit or not."

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Platform enhancements such as mobile payments, connected home solutions, and personal health monitors should be a far more important driver over time, it said, adding that this will determine if Apple's cash flow generation can remain robust and substantially increase from current levels.

The upgrades come ahead of Apple's worldwide developer conference (WWDC) which kicks off in San Francisco on Monday. The event tends to concentrate on Apple's latest software developments and Stuart Jeffrey at Nomura is expecting some new releases to be announced.

"We believe that Apple may release details of its wearables platform, including new APIs (application programming interfaces) for developers, as well as perhaps a beta-type launch of a smart watch," he said in a note on Friday morning, but added that a smart watch – touted to be called the iWatch - could give a limited boost to revenues.

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Jeffrey also expects Apple to detail some of its plans for Beats next week, as well as outline some of its thoughts around home automation, which many consider as the next frontier in technology. Apple is well placed to act as a catalyst for many of these new services, he said, but he continues to see them as solutions to sustain Apple's hardware sales rather than as new earnings streams in their own right.

Boston-based research firm Trefis, which maintained its $638 target price for Apple on Thursday, believes that the music streaming service is likely to have been the key reason behind the acquisition.

"Apple is no longer the formidable digital music powerhouse that it once was, with the advent of online streaming music services such as Spotify," it said.

"These services have seen a significant uptake over the last few years, and this has been impacting Apple's iTunes business."