Apple (NASDAQ: AAPL) is in talks with Alphabet (NASDAQ: GOOGL) to incorporate Google’s Gemini AI engine into the iPhone.
According to insights from BofA Securities, if Apple manages to strike a deal with either Google or OpenAI, it could introduce additional hardware functionalities as early as 2025.
Wamsi Mohan, an analyst at BofA Securities, expressed optimism regarding Apple’s prospects, maintaining a bullish outlook with a Buy rating and a price target of $225 for the company’s stock.
In the note, Mohan suggested that Al could spearhead a “multi-year upgrade cycle,” paving the way for the company to improve gross margins in the future.
The analyst wrote,
“It remains unclear if Apple will choose to leverage a cloud-based model that could potentially have higher latency vs. on-device option.”
He added,
“We view incremental on-device functions, especially in 2025.”
The analyst cautioned against the financial implications of a licensing agreement, especially given Apple’s massive user base of 2.2 billion. Mohan proposed potential pricing structures, suggesting that a fixed charge per device for on-device features could expedite the time to market while concurrently fostering in-house technological advancements.
Apple (NASDAQ: AAPL) Stock Price Action
AAPL stock gained 0.64% to close at $173.72 on Monday. The traders had exchanged hands with 75,222,338 (75.22 million) shares compared to the average daily trading volume of 58.51 million.
AAPL AAPL shares AAPL stock AAPL stock news Apple NASDAQ: AAPL
