By Kwanwoo Jun
LG Innotek shares rallied Wednesday, tracking Apple's gains overnight after the U.S. tech giant struck a deal with OpenAI to bring artificial intelligence to iPhone users.
Shares of the South Korea-based Apple supplier climbed as much as 19% to 272,000 won ($197.28) in early trade, outperforming the benchmark Kospi's 0.4% gain. The shares are on course for their sharpest daily gain in four years.
LG Innotek, affiliated with South Korean consumer-electronics giant LG Electronics, has long been a major supplier of camera modules and other parts for iPhones.
The rally in LG Innotek reflects market expectations that Apple adopting AI features for its products could prompt iPhone users to replace their old devices with new models earlier than expected this year, which should boost demand for LG components, Daishin Securities analyst Kangho Park said in a research note.
Park expects LG Innotek's 2024 operating profit to jump 33% to KRW1.110 trillion on growing shipments of higher-priced camera modules and other components, and forecasts an increase in sales of new iPhone 16 products, likely due in September, amid the AI boom.
Apple shares surged more than 7% on Tuesday, sending its market value to a record high of $3.176 trillion, after the OpenAI-Apple collaboration was announced Monday at an annual developer conference.
OpenAI will handle some functions that Apple's own AI can't, such as answering more complex queries or composing messages with permission from the user.
Apple said it would integrate its new personalized AI system, dubbed Apple Intelligence, with other AI models, including products developed by Google.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
June 11, 2024 22:48 ET (02:48 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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