Now that Apple has finally launched its long-awaited spatial computing headset, Apple Vision Pro, investor focus is shifting to the company's upcoming announcements on artificial intelligence, analysts say. That news could be a major catalyst for Apple stock.
On a conference call with analysts on Feb. 1, Chief Executive Tim Cook said Apple will share its exciting work in the AI space later this year.
Wedbush Securities analyst Daniel Ives thinks Apple will detail its AI innovations at its Worldwide Developers Conference, or WWDC, in June.
"We believe the 'Super Bowl moment for Apple' will be when Cook & Co. finally take the covers off the generative AI technology being worked on in the labs of Apple Park and introduce it to developers and consumers at WWDC," Ives said in a note to clients this week.
Apple is likely to add AI features to its iPhone 16 smartphone lineup this fall, Ives said. That will kick off a new cycle of growth for Apple, he said.
Ives rates Apple stock as outperform with a 12-month price target of 250.
On the stock market today, Apple stock slipped 0.5% to 184.15.
Apple Is 'Underappreciated AI Beneficiary'
An AI-enabled iPhone could shorten upgrade cycles and boost average selling prices, Evercore ISI analyst Amit Daryanani said in report this week.
If Apple offers the ability to run large language models on the iPhone, the handsets probably would require increased memory in the form of DRAM and Nand chips, he said. That would raise prices for the handsets.
Plus, AI could lead to new killer apps for the iPhone, Daryanani said.
"We think Apple is an underappreciated AI beneficiary that stands to significantly benefit from integrating LLMs into their core technology," Daryanani said.
Siri 2.0 Could Deliver On Original Promise
Apple will use AI to smarten up its Siri personal assistant software, he said.
"The product (Siri) currently lacks sufficient functionality and a truly capable and reliable virtual assistant would be a game changer," Daryanani said. Siri 2.0 could "deliver on what virtual assistants promised when originally launched," he said.
AI enhancements to Apple's iOS operating system could provide significant improvements to the iPhone user experience, he said. Possible applications include predictive text, automated scheduling, and visual search, Daryanani said.
Apple Stock Has Formed Flat Base
Daryanani rates Apple stock as outperform with a price target of 220.
In 2023, Apple purchased 32 artificial intelligence startups, more than any other tech company, 9to5Mac reported last week.
Apple stock has formed a flat base with a buy point of 199.62, according to IBD MarketSmith charts. That buy point is also its all-time high, reached on Dec. 14.
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