Apple stock rose Friday after billionaire hedge fund manager Daniel Loeb said he sees room for shares in the consumer electronics giant to climb higher.
In a letter to investors, Loeb said Apple will benefit from adding artificial intelligence technology to its iPhones, Reuters reported. Loeb's firm, Third Point, has built a position in Apple stock.
"Despite the stock's recent strong appreciation, we see room for significant upside ahead as the magnitude of this new AI opportunity surprises," Loeb said. "AI-related demand could drive a step change improvement in Apple's revenue and earnings over the next few years."
AI features, branded Apple Intelligence, should drive sales of new iPhones because they will only be available on newer handsets, he said.
Apple Stock Called 'Under-Owned'
Apple stock has been "under-owned" by institutional investors who fear the company might become an "AI loser," Loeb said. But Loeb disagrees with that assessment.
Apple unveiled its AI strategy in June at its Worldwide Developers Conference. Its strategy involves both on-device and data-center processing with a focus on privacy and security. It will use its own AI models and third-party models, starting with OpenAI's ChatGPT.
On the stock market today, Apple stock rose 1% to close at 226.84.
The next catalyst for Apple stock likely will be the company's iPhone 16 launch event. That's due to occur in early to mid-September.
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