Apple (AAPL) stock rose 7% on Tuesday to reach a record closing high for the first time in 2024 as investors digested the announcement of its artificial intelligence platform, Apple Intelligence.
After falling on Monday during and after the company’s WWDC conference, the stock rose, notching its best single-day performance since November 2022, as some Wall Street analysts welcomed the company’s announcements.
“If you look at the signal apart from the noise, you realize this is an unprecedented capability that Apple will bring and will integrate AI into everyday life,” Gil Loria, managing director of DA Davidson, told Yahoo Finance.
Following Monday’s event, Luria upgraded Apple to Buy from Neutral and raised his price target to $230 from $200.
Apple on Monday announced “Apple Intelligence,” its long-awaited foray into generative artificial intelligence. The platform will be integrated across the company’s hardware and software products, from iPhone and Mac to Mail, Messages and Photos, the company said. Apple Intelligence will be available for iPhone 15 Pro, iPad, and Mac devices powered by Apple’s M1 series chipsets and later later this fall.
Key features of the launch include updates to Siri, which will now be able, for example, to analyze phones for addresses sent in messages or find photos in the phone’s photo library based on voice prompts. Apple also launched new software updates for iPhones, watches, and computer products.
“Our experience with consumer surveys with previous generations of iPhone launches tells us that the hardware upgrade cycle is based more on a combination of feature upgrades across various applications, which in the aggregate will provide…reasons to upgrade over the next few years.” JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
“The release of AI features across Mac, iPad and iPhone will support the upgrade cycle across all devices,” he added.
These announcements cap a month of excitement for the stock where rumors have already circulated about some of the news, including a partnership with ChatGPT operator OpenAI.
After being briefly passed by Nvidia (NVDA), the iPhone maker’s stock is now back as the second-largest company (behind Microsoft) in the world with a market capitalization of more than $3.1 trillion.
After a slow start to the year amid fears of slowing iPhone demand, Apple stock is now up more than 15% in the past two months. Analysts like Luria and Chatterjee believe that the next iPhone upgrade cycle could be on the horizon as new AI features are only coming to the iPhone 15 pro and later generations.
“As people buy new phones this holiday season, they will see this great function,” Loria said. “They will show their friends and family and the product upgrade cycle will happen over the next few months and quarters.”
This should be a major catalyst for the stock moving forward, Loria said.
“The stock was flat because there was no revenue growth at Apple,” Loria said. “Now, we believe this will allow Apple’s overall growth to accelerate from low single digits to mid single digits, and perhaps even high single digits over the next year or two. This is what could drive Apple stock.”
Josh Schaeffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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