Wedbush analyst Daniel Ives raised the firm's price target on Apple to $425 from $375 and keeps an Outperform rating on the shares. The stock closed Wednesday down $6.47 to $360.06.

During 2021 Apple has "strong potential" to be the first $2 trillion valuation given the 5G tailwinds and services momentum potential over the coming years, Ives tells investors in a research note. The analyst is seeing a "continued demand snapback" in China. The stage is setting for a "massive pent up" iPhone 12 cycle heading into the fall in this key region as well as globally, says Ives.

The analyst believes China remains a "key ingredient in Apple's recipe for success" as he estimates roughly 20% of iPhone upgrades will be coming from this region over the coming year. Further, Ives assigns a $600B to $650B valuation range for Apple's Services business, saying the unit is "getting a new appreciation by investors" during the COVID-19 pandemic.