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Apple Shares Hit Record High After AI Announcements
Litter (AAPL) shares rose more than 5% on Tuesday to hit 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, shares rose as some Wall Street analysts applauded the company’s announcements.
“If you look at the signal away from the noise, you will realize that this is an unprecedented capability that Apple will introduce and will integrate AI into everyday life,” Gil Luria, managing director at DA Davidson, told Yahoo Finance (video above ).
Following Monday’s event, Luria upgraded Apple to Buy from Neutral and raised his price target from $200 to $230.
On Monday, Apple announced “Apple Intelligence,” its long-awaited foray into the generative AI space. The company said the platform would be integrated into all of the company’s hardware and software products, from iPhone and Mac to email, messaging and photos. Apple Intelligence will be available for iPhone 15 Pro and iPads and Macs running Apple’s M1 series chips and newer later this fall.
Key features of the release include updates to Siri, which will now be able to, for example, scan phones for addresses sent in messages or find photos in a phone’s photo library based on voice commands. Apple too released new software updates for your iPhone, watches and computer products.
“Our experience with consumer research with previous generations of iPhone releases tells us that the hardware upgrade cycle is most driven by a collection of feature updates across multiple apps, which together will provide… reasons to upgrade in the coming years .” JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
He added: “The rollout of AI capabilities on Mac, iPads and iPhones will support an update cycle across all devices.”
The announcements capped off a month of excitement for the stock with buzz surrounding some news, including a partnership with ChatGPT operator OpenAI, it was already leaking.
After being briefly overtaken by Nvidia (NVDA), the iPhone maker’s shares are once again the second most valuable company (behind Microsoft) in the world, with a market capitalization of more than 3.1 billion dollars.
Apple CEO Tim Cook delivers remarks at the start of the Apple Worldwide Developers Conference (WWDC) on June 10, 2024, in Cupertino, California. (Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)
After a slow start to the year amid concerns about slowing iPhone demand, Apple shares have risen more than 15% in the past two months. Analysts like Luria and Chatterjee believe the next iPhone update cycle could be on the horizon, as new AI features will only reach the iPhone 15 Pro and later generations.
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“As people buy new phones this holiday season, they will see this great functionality,” said Luria. “They will show friends and family that the product update cycle will happen over the next few months and quarters.”
This, Luria argued, should be a key catalyst for the stock to advance.
“Shares are flat because there has been no revenue growth at Apple,” Luria said. “Now, we believe this will allow Apple’s overall growth to accelerate from low single digits to mid single digits, perhaps even high single digits, over the next year or two.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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