Apple (NASDAQ:AAPL) stock surged over 5% on Tuesday, hitting an intraday record as investors responded positively to the unveiling of its AI platform, Apple Intelligence.
Following a dip on Monday during and after the company’s Worldwide Developers Conference (WWDC), Apple shares climbed as Wall Street analysts praised the announcements.
“If you look at the signal away from the noise, you realize that this is unprecedented capability that Apple is going to introduce and it’s going to integrate AI into everyday life,” D.A. Davidson managing director Gil Luria told Yahoo Finance.
Post-event, Luria upgraded Apple to a buy from Neutral and increased his price target to $230 from $200.
On Monday, Apple introduced “Apple Intelligence,” its much-anticipated entry into the generative AI space. The platform will be integrated across Apple’s hardware and software, from the iPhone and Mac to Mail, Messages, and Photos. Apple Intelligence will be available on the iPhone 15 Pro and iPads and Macs running Apple’s M1 series chips and newer later this fall.
Key features include updates to Siri, which can now, for instance, parse phones for addresses in messages or find photos in a phone’s photo library based on voice prompts. Apple also launched new software updates for its iPhone, watches, and computer products.
“Our experience with consumer surveys with prior generations of iPhone launches tell us that the hardware upgrade cycle is more driven by a collection of feature upgrades across diverse applications, which in aggregate will provide reasons to upgrade over the next few years,” JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
He added, “The release of the AI features across Mac, iPads, and iPhones will support an upgrade cycle across all the devices.”
The announcements capped off a month of excitement around Apple’s stock, fueled by rumors of a partnership with ChatGPT operator OpenAI and other news.
After briefly being overtaken by Nvidia (NASDAQ:NVDA), Apple is now back as the second most valuable company in the world (behind Microsoft) with a market capitalization of over $3.1 trillion.
Following a slow start to the year due to concerns over slowing iPhone demand, Apple stock has risen more than 15% in the past two months. Analysts like Luria and Chatterjee believe the next iPhone upgrade cycle could be imminent, as the new AI features will be available only on the iPhone 15 Pro and later generations.
“As people buy new phones this holiday season, they’re going to see this great functionality,” Luria said. “They’re going to show their friends and family, and the product upgrade cycle will happen over the next few months and quarters.”
This, Luria argued, should be a key catalyst for the stock moving forward.
“The stock’s been flat because there hasn’t been revenue growth at Apple,” Luria said. “Now, we think that this will allow Apple’s overall growth to accelerate from the low single digits into the mid-, maybe even high-single digits over the next year or two. That’s what can drive Apple’s stock.”
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
