- What Happened: Despite Apple stock’s comparatively slow start to the year in the Mag 7 club, Business Insider reported that CFRA and Bernstein increased its price forecasts for Tim Cook-led to $240 per share, citing the company’s achievements in AI.
- This year, the stock has only increased by 11.77%, while investors have had better returns from its other Mag 7 peers—all except Tesla. Apple, Microsoft, Amazon, Nvidia, Tesla, Meta Platforms, and Google parent Alphabet are the seven stocks that make up the Magnificent Seven.
- As of now, only Tesla Inc. has underperformed Apple in 2024 according to the Mag 7.
- According to CFRA analyst Angelo Zino, Apple’s “Apple Intelligence” product, which was unveiled at last week’s WWDC, is about to turn the iPhone into “the ultimate personal assistant.” According to Zino, Apple’s AI will spur upgrades from customers and sustain years of expansion.
- “With AI being more evolutionary than cyclical and supporting multiple years of growth, we expect it to help support incremental consumer upgrades, driven by loyalists and an aging installed base,” Zino stated.
- Toni Sacconaghi, an analyst at Bernstein, believes Apple has a lot of promise, particularly if it can successfully integrate AI into its enormous installed base of iPhone users. Sacconaghi proposes that Apple might make money off of AI features by charging commissions for third-party apps, increasing app store sales, and running advertisements.
- Sacconaghi stated, “Apple can bring AI to the masses, with increasing, everyday utility.”
“Apple is allegedly not paying ChatGPT, underscoring the influence it has.”
- Why It Matters: With its recent rise to all-time highs, Apple’s stock has been on an incredible run. Its venture into consumer-centric AI has led to it being recognized as one of the most overbought stocks on Wall Street.
- Jim Cramer of CNBC, meanwhile, has also suggested that investors think about selling their AI stock holdings because he believes the market may be overdone.
- Not just Bernstein and CFRA, but Wedbush’s Dan Ives is also enthusiastic about Apple’s AI initiatives. It was a home run, in my opinion. In the end, they met all of their requirements for OpenAI and privacy, and in essence, they are setting out the framework for developers, Ives stated in an analyst note released following WWDC.
- Price Action: BenzingaPro data indicates that Apple shares ended Friday’s trading session 1.04% lower at $207.49 a share.
Source:
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