Wells Fargo is getting more bullish on Apple ahead of earnings.

The bank raised its price target on the tech giant to $275 from $225, reiterating its overweight rating on the stock. The new forecast implies upside of nearly 23% going forward.

"Despite initial muted consumer interest, we increasingly think Apple Intelligence / iOS 18 ( Fall ) release w/ AI features will drive a significant upgrade cycle on a historically high aged installed base ( 1.3B+ iPhones; 4.5+ yr refresh cycles ) ," analyst Aaron Rakers wrote.

He also sees "potential for moderate upside to iPhone estimates" when the company posts its fiscal third-quarter figures on Aug. 1.

Apple shares gained 1.1% in premarket trading. The shares have climbed more than 16% this year.