Nearing its Worldwide Developers Conference 2024, Apple (NASDAQ:AAPL) hinted that some AI reveals could come from this conference, which many are expecting could drive demand for AAPL stock, which hasn’t been there as much as it has in the past.
Now the world’s third-largest company behind Microsoft (NASDAQ:NVDA) and Nvidia (NASDAQ:NVDA), Apple’s relative lack of growth has become a problem for some investors. The stock has performed well in recent months, though it has lagged the eye-popping performance of companies like Nvidia.
Let’s dive into why investors may want to consider AAPL stock and what might come of its upcoming WWDC conference.
What to Expect on June 10
Apple is expected to introduce iOS 18 and integrate generative AI features into apps like iMessage, Photos, and Safari. The launch follows Apple’s unveiling of the new iPad Pro, powered by the M4 chip capable of supporting local AI applications.
While iPhone 16 updates may wait until fall, analysts expect AI-related announcements at WWDC.
Bank of America (NYSE:BAC) analysts expected a surge in demand for “IntelliPhones,” driven by AI capabilities, akin to the transformative shift brought by smartphones.
These analysts projected a faster adoption rate for AI phones compared to smartphones and 5G technology, suggesting a significant upgrade cycle opportunity for Apple.
Recent speculation has hinted at a prospective collaboration between Apple and Microsoft-backed OpenAI, as well as Alphabet’s (NASDAQ:GOOG) Google, to integrate advanced AI models like GPT-4o and Gemini into Apple’s ecosystem.
Such a partnership could potentially revolutionize Apple’s voice assistant, Siri, enhancing its capabilities significantly.
iPhone 16 Will Be Innovative
At the WWDC 2024 event, AI innovations will take the spotlight. Bloomberg reports that Siri, Apple’s voice assistant, has undergone significant revamps that allow users to control specific app functions through voice commands.
The said innovation could be a gamechanger as it leverages with language models for enhanced AI capabilities. This marks a pivotal step for Apple’s AI future.
Siri takes center stage, aiming to reclaim its pioneering status after falling behind competitors. Set to debut in iOS 18, its full potential across devices beyond the iPhone 16 remains uncertain.
Predictions suggest a revamped Siri at WWDC, enabling precise control over iPhones and iPads, with capabilities extending to managing documents, emails, and more.
These enhancements are expected to extend to iPads and Macs, initially limited to Apple’s apps and gradually expanding to support numerous commands.
The Effect in Stock Price
Post-WWDC, short-term Apple stock volatility expected, but long-term prospects positive. Historically, stocks dipped post-event but rose 12.3% after three months. Analyst Dan Ives optimistic, raising Apple’s target price to $275. Key focus on Apple’s AI partnerships for market movement.
Melius Research analysts anticipated a significant uptick in Apple stock ahead of WWDC, likening it to the pivotal iPhone launch in 2007. Despite the typical pre-event rally and subsequent dip, they noted the potential for AI announcements to disrupt this trend.
Highlighting the impact on iPhone sales and service revenue growth, Melius emphasized the long-term investor’s focus.
Buy AAPL Stock
Now sitting at $9 trillion, the tech market is expected to surge to over $12 trillion by 2028. Apple also has strong market share in the smartphone sector, holding 23% of the percentage. This could be beneficial for the sector’s expansion as well.
Investing around $1 billion annually in AI research, Apple aims to enhance its AI capabilities, including potential collaborations with Alphabet to introduce generative AI features on the iPhone, bolstering its smartphone dominance.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
