Apple Inc. (NASDAQ:AAPL) has once again become one of the hottest stocks. Two major research firms, UBS and Baird Equity Research, raise their respective price targets on the stock on Thursday. UBS increased its PT to $700 after Apple surpassed its previous price target of $625 earlier this week. Baird has upped its target price from $620 to $665.

Beats to give Apple much-needed boost in digital music

Baird Equity Research analyst William V. Power said that the $3 billion acquisition of Beats Electronics is a low risk transaction for Apple Inc. (NASDAQ:AAPL). It could help the tech giant regain its leadership position in digital music. The iTunes momentum has faded due to the rise of subscription music services. Jimmy Iovine, Dr. Dre and Beats Music could provide Apple a much-needed boost.

Mr. Power expects Apple Inc. (NASDAQ:AAPL) to successfully leverage its iTunes media store, especially after the acquisition of Beats Music, which offers streaming service at $9.99 per month. Though iTunes operates just above the break-even, it enjoys 70% market share in digital media sales. It has helped Apple build very sticky relationships with the iTunes customers. The iPhone maker has successfully converted the relationships that began with the iPod into the iPhone, iPad and iMac. The iTunes has over 800 million registered users.

iPhone 6 a strong reason to buy Apple stock

UBS analyst Steven Milunovich said in a research note that the upcoming iPhone 6 launch will be nothing less than a blockbuster. The next-gen iPhone will reportedly be available in two screen sizes, 4.7-inch and 5.5-inch, and will be available in September. Milunovich cited a survey conducted by YouGov.com, which found that more than 50% U.S. iPhone users are due for an upgrade in the next 10 months. A large number of the iPhone 4 and iPhone 4S users skipped the last year’s upgrade cycles, and they are holding out for the big screen iPhone 6.

Apple iPhone 6

Steven Milunovich noted that the iPhone 6 along with the potential for a wearable device, most likely iWatch, represent solid reasons to buy Apple Inc. (NASDAQ:AAPL) stock. UBS believes that the investor sentiment will change radically starting next week when the Worldwide Developers Conference kicks off. The Cupertino-based company is expected to announce the iOS 8 and Mac OS X 10.10 at the conference. Beats Electronics co-founders Dr. Dre and Jimmy Iovine, who will now join Apple, may also take the stage at the event.

Apple Inc. (NASDAQ:AAPL) shares jumped 1.24% to $643.26 at 11:52 AM EDT on Friday.