Apple's (AAPL.US) stock has cooled off in recent weeks after the company's share price rose and approached the historical closing high it set last month. However, analysts at Evercore believe that the market's pessimism about Apple is overblown.

Before Apple reports its September quarter earnings at the end of this month, Evercore advises investors to prepare for a stock rebound, believing that Apple has the ability to exceed lower market expectations, and gives its stock a "tactical outperformance" rating.

Evercore analyst Amit Daryanani wrote in a report: "Bearish investors continue to focus on the Chinese smartphone market, but we believe this risk is exaggerated and can be offset by growth in emerging markets and a strong upgrade cycle in the United States. Our surveys show that there is strong demand for upgrades in the U.S. market, partly driven by artificial intelligence (AI)."

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Daryanani rates Apple's stock as "outperform" with a target price of $250. On Monday, Apple's share price rose by more than 1% to $231.3, while the S&P 500 index rose by 0.5%.

Daryanani is not the only analyst with an optimistic view of Apple. JP Morgan analyst Samik Chatterjee wrote in a research report that, based on the company's tracking data on Apple's product supply, delivery times for the more expensive Pro Max model have decreased, but less so than in previous iPhone cycles, "which increasingly supports our view that initial weakness is only temporary."

Since Apple launched its artificial intelligence "Apple Intelligence" in June this year, Apple's stock has sparked increasing controversy on Wall Street. The company's share price has risen sharply in the months since, with hopes for a new major upgrade cycle driving up the stock price. However, analysts have also expressed concerns about whether artificial intelligence can significantly drive demand growth and when it can be achieved.

However, these concerns have not worried Evercore's analysts, who are more focused on the long-term potential of the technology. Daryanani wrote: "The phased rollout of artificial intelligence should extend the iPhone's upgrade cycle, as the release of new features and coverage of more markets will drive strong growth in word-of-mouth marketing."