AAPL : AI Launch sends It Skyrocketing ! Buy ?
In my yesterday “Ideal” post about $Apple(AAPL)$ , I have already forewarned of a possible $220 new price target. (click here ! to read and give a “Like” ok - tks)
Is it coming true ? Let’s find out.
On the 2nd day of the WWDC annual conference, Apple Inc share price began to rise as predicted and rightly so!
What have transpired ?
Apple's (AAPL) stock surged +7% on Tue, 11 Jun 2024 to reach a record-high close for the first time in 2024 as investors digested the announcement of its AI platform, Apple Intelligence.
Wall Street analysts cheered the company's announcements, after the stock fell on Monday during the company's WWDC conference.
However after the conference, the stock moved higher, notching its best single-day performance since November 2022.
D.A. Davidson, MD — Gil Luria commented:
Look at the signal away from the noise, investor will realize that this is unprecedented capability that Apple is going to introduce.
And it's going to integrate AI into everyday life.
He has upgraded Apple to “Buy” from “Neutral”.
He has raised Apple’s price target to $230 per share from $200.
On Monday, Apple announced "Apple Intelligence," its long-awaited foray into the generative AI space.
The company said the platform would be integrated across the company's hardware and software products, ranging from the iPhone and Mac to mail, messages, and photos.
Apple Intelligence will be available for:
iPhone 15 Pro.
iPads and Macs running Apple's M1 series chips and newer later this fall.
Key features of the launch include updates to Siri, which will now be able to, for instance, parse phones for addresses sent in messages or find photos in a phone's photo library based on voice prompts.
Apple also launched new software updates for its iPhone, watches, and computer products.
$JPMorgan Chase(JPM)$, Senior Analyst, Samik Chatterjee has also weigh-in:
"Our experience with consumer surveys with prior generations of iPhone launches tell us that the hardware upgrade cycle is more driven by a collection of feature upgrades across diverse applications, which in aggregate will provide...reasons to upgrade over the next few years".
"The release of AI features across Mac, iPads and iPhones will support an upgrade cycle across all the devices."
The announcements capped off a month of excitement for the stock as rumors around some of the news, including a partnership with ChatGPT operator OpenAI, had already been percolating.
Valuation Ranking.
After briefly being surpassed by $NVIDIA Corp(NVDA)$, Apple Inc is now back as the 2nd-most-valuable company (behind Microsoft) in the world with a market capitalization of > $3.1 trillion. (see below comparison)
Top 3 valuation ranking
Final Words.
Following a slow start to 2024 amid concerns of slowing iPhone demand, Apple stock is now up more than 15% in the past 2 months.
Analysts like Luria & Chatterjee believe the next iPhone upgrade cycle could be on the horizon as the new AI features are only coming to iPhone 15 pro and later generations.
Wall Street veterans believed:
As people buy new phones this holiday season, they're going to see this great functionality.
They would show & show-off to their friends and family.
The product upgrade cycle will happen over the next few months & quarters.
This should be a key catalyst for Apple Inc, moving forward.
Apple Inc has been flat because there has not been revenue growth at Apple.
The new AI elements, will allow Apple's overall growth to accelerate from the low single digits into the mid-, maybe even high-single digits over the next year or two.
That's what can drive Apple's stock.
My viewpoints: (mine only)
The reason why Apple stock price is rising I believed is because Wall Street analysts are projecting its “future forward” value into its current price.
I supposed there is a lot riding on Tech companies being seen at the forefront of next technology leap.
As the last Magnificent 7 stock to take a stab at Artificial Intelligence, better late than never, right!
On the partnership with OpenAI and leverage of ChatGPT, I believed this is a short-term tempoary solution.
For a long term solution, I am not surprised that Apple will want to have their own AI-engine further down the road.
With a positive outlook by seasoned analysts, it should be time to start buying into this tech giant when it corrects itself, I believed.
Lastly, a little drama and publicity (good or bad) goes a lot way. (see below)
The druggie CEO made a poor attempt to steal Apple’s thunder again with a nonsensical threat (see above), while his lawyers on Tuesday quietly moved to dismiss the billionaire’s lawsuit against OpenAI and CEO Sam Altman.
All this happened on the eve of a hearing regarding OpenAI’s motion to dismiss the lawsuit filed by Mr Musk’s lawyers in March 2024.
Investors should ignore all the shrouded noises, to distract our focus & attention on Apple, all the while harbouring hopes of IT giant regaining its #1 spot in the not too distant future!
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