Apple shares surged by 5% to reach a new record high of around $203 per share following the announcement of the company’s foray into artificial intelligence (AI) at its annual developer conference. At the event, Apple unveiled a variety of new AI features, including improvements to its voice assistant Siri, integration with OpenAI’s ChatGPT, new writing assistance tools, and customizable emojis. While the company positioned these features as being accessible to the average person, users may need to upgrade their iPhones to access them.
This record-breaking share price came the day after Apple’s developer conference, giving investors hope for how the company will leverage the growing AI trend. Analysts from Morgan Stanley praised Apple’s AI features and suggested that they position the company as having the most differentiated consumer digital agent. They anticipate that these features will encourage consumers to upgrade their iPhones, thereby accelerating device replacement cycles. The analysts emphasized the importance of Apple delivering on its AI features when they become available in the fall.
Bank of America analysts also expressed optimism about Apple’s AI announcements, believing that they will lead to an upgrade cycle for AI-enabled iPhones. They maintained a buy rating on the stock due to the potential for a multi-year upgrade cycle, gross margin upside, and growth in services. Meanwhile, Evercore analysts left the conference feeling more confident in Apple’s AI strategy, particularly because they believe it will incentivize users to upgrade their devices. They see the restriction of Apple Intelligence to newer iPhones as a factor that could kick off an iPhone super cycle.
Overall, analysts are bullish on Apple’s AI initiatives and believe that the company is well-positioned for future success. They anticipate a return to growth and more sustained outperformance as a result of the new features introduced at the developer conference. With a multi-year product refresh on the horizon, analysts are optimistic about Apple’s potential for continued growth and advancement in the AI space. As Apple prepares to roll out its AI features to consumers in the fall, investors are eagerly anticipating the impact these advancements will have on the company’s performance in the market.
