Apple stock hasn’t racked up Nvidia-like gains since ChatGPT’s launch almost two years ago—but that doesn’t prevent the iPhone maker from racking up gains from the AI fervor.
For Raymond James analyst Srini Pajjuri, the stock is “a more stable AI play for volatile times.”
Apple will offer Apple Intelligence AI features only on the iPhone 15 Pro and the iPhone 16, which is coming this fall.
Pajjuri, in a research note on Thursday, wrote that he believes users won’t want to miss out on the technology, sparking a “multi-year upgrade cycle” that will boost earnings. Apple reports its fiscal third-quarter earnings on Thursday.
The analyst also increased his price target to $250 from $200. The new number implies the stock could jump 15% from its current level. He maintained his Outperform rating.
On Friday, the stock ticked up 0.26% to $218.05.
Apple’s struggles in China, the world’s second-largest economy, might be what was weighing on the stock.
The tech titan’s market share in China fell to 14% in the second quarter, according to tech market analyst firm Canalys. For the first time, the iPhone isn’t one of the top five smartphones in China.
Apple is trailing Chineses brands such as vivo, OPPO, and Huawei, which have made “incorporating technologies such as Generative AI into products and services” a priority, Canalys research analyst Lucas Zhong said. That underlines why Apple must pull off its AI pivot.
Until Apple has numbers on the impact of Apple Intelligence on revenue, investors will scrutinize the coming results for more insight about iPhone sales in China as well as any more clues about AI from CEO Tim Cook.
