Apple stock surges to record high after AI announcements
Apple’s (AAPL) stock surged by as much as 6% on Tuesday to reach an intraday record as investors digested the announcement of its AI platform, Apple Intelligence.
After the stock fell on Monday during and after the company’s WWDC conference, the stock moved higher as some Wall Street analysts cheered the company’s announcements.
“If you look at the signal away from the noise, you realize that this is unprecedented capability that Apple is going to introduce and it’s going to integrate AI into everyday life,” D.A. Davidson managing director Gil Luria told Yahoo Finance (video above).
Following Monday’s event, Luria upgraded Apple to Buy from Neutral and raised his price target to $230 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 the iPhone 15 Pro and 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.
“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,” JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
He added, “The release of the 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.
After briefly being passed by Nvidia (NVDA), the stock of the iPhone maker is now back as the second-most-valuable company (behind Microsoft) in the world with a market capitalization of more than $3.1 trillion.
Following a slow start to the year amid concerns of slowing iPhone demand, Apple stock is now up more than 15% in the past two months. Analysts like Luria and 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.
“As people buy new phones this holiday season, they’re going to see this great functionality,” Luria said. “They’re going to show their friends and family and the product upgrade cycle will happen over the next few months and quarters.”
This, Luria argued, should be a key catalyst for the stock moving forward.
“The stock’s been flat because there hasn’t been revenue growth at Apple,” Luria said. “Now, we think that this 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.”
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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