Apple CEO Tim Cook speaks at Apple's Worldwide Developer Conference (WWDC) at the San Jose Convention Center in San Jose, California on Monday, June 4, 2018.

Bank of America Merrill Lynch bumped its price target on Apple stock up to $250 per share from $230 per share on Tuesday, citing confidence in the tech giant's push to diversify its mobile application offerings.

"The strong growth rate of non-gaming categories gives us increased confidence in the sustainability of strong App Store sales, and reduces risk of dependence on one single category of Apps," analyst Wamsi Mohan wrote in a note.

Apple shares fell 0.2 percent in trading, closing at $215.04 per share. Bank of America's price target represents a 16 percent premium on the stock.

"We raise our Services revenue estimate for 2019 by about $800 million and factor in slightly higher margins, and reiterate Buy on strength in Services, stable hardware & strong capital returns," Mohan said.

The firm's analysis of third-party data "indicates" that mobile games contribution to the App Store's revenue is coming down, despite remaining the largest contributor overall. App Store revenue growth each year is "now being driven by non-gaming categories," Mohan said.

"Categories like Entertainment Apps and Photo & Video Apps are becoming an incrementally larger portion of the App Store," Mohan added.