Apple (NASDAQ: AAPL) stock surged to an all-time high Tuesday, a day after its highly anticipated Worldwide Developers Conference (WWDC) keynote. At the event, Apple revealed iOS 18 powered by Apple Intelligence and announced a pioneering AI partnership with OpenAI.
Apple stock (AAPL) surged by 7.3% to close at a record high of $207.15. This surge comes after a lackluster first quarter, during which the stock saw a nearly 11% decline. However, in the second quarter, it has rebounded strongly, gaining 21%, although it still trails behind other major tech companies’ performance year-to-date.
During the Worldwide Developers Conference (WWDC) keynote, Apple unveiled iOS 18, its latest operating system, and introduced Apple Intelligence, a new personal intelligence system. Apple Intelligence leverages on-device content to provide personalized assistance. Additionally, Apple announced a groundbreaking AI partnership with Microsoft-backed OpenAI to integrate ChatGPT into iOS 18, set to launch later this year.
The iOS 18 update will be available in the fall as a free software update for iPhone Xs and newer devices. Meanwhile, Apple Intelligence will debut in beta as part of iOS 18 for iPhone 15 Pro, iPhone 15 Pro Max, iPad, and Macs with an M1 chip or later.
Apple (NASDAQ: AAPL): Analysts Views on AI Strategy
JPMorgan analysts expressed confidence in Apple’s WWDC keynote, citing significant enhancements across native and third-party apps with the integration of Apple Intelligence. They forecast a robust upgrade cycle with the launch of the iPhone 16 and the release of iOS 18 later this year.
Wedbush analysts highlighted Apple’s AI strategy, emphasizing its focus on personalization and large language models (LLMs) integrated into devices. They believe this approach will spur an AI-driven iPhone upgrade cycle, starting with the iPhone 16.
The analysts stated,
“Apple is taking the right path to implement AI across its ecosystem while laying out the foundation for the company’s multi-year AI strategy across the strongest installed base of 2.2 billion iOS devices over the coming years.”
Melius Research analysts also shared an optimistic outlook, predicting a substantial upgrade cycle. They highlighted that older devices, particularly those purchased during the COVID-19 pandemic, would become obsolete without AI capabilities.
They added,
“We now have more conviction in our Super Cycle thesis that could even result in iPhone revenue growth of about 20% for up to 2 years.”
Analysts expect the AI-driven upgrade cycle to commence gradually in September 2024 and peak in the second half of 2026.
