Shares of Apple ( AAPL ) rose 7% on Tuesday to hit a record high for the first time in 2024.
The stock rose for its best one-day performance since November 2022 as some Wall Street analysts cheered the company’s announcements, after shares fell during and after the company’s WWDC keynote on Monday.
Gil Luria, managing director of DA Davidson, told Yahoo Finance: “If you look at the signal away from the noise, you’ll see that this is an unprecedented opportunity for Apple to integrate AI into everyday life” (video above).
After Monday’s event, Luria upgraded Apple to Buy from Neutral and raised his price target to $230 from $200.
On Monday, Apple announced its long-awaited “Apple Intelligence” program into the field of generative artificial intelligence. The company said the platform will be integrated into the company’s hardware and software products, from iPhone and Mac to mail, messages and photos. Apple Intelligence will be available this fall for the iPhone 15 Pro and iPads and Macs powered by Apple’s M1 series chips and newer.
Key features of the launch include updates to Siri, which will now be able to, for example, analyze phones for addresses sent 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 previous-generation iPhone introductions and consumer surveys tells us that the hardware upgrade cycle is driven more by a collection of feature upgrades across different applications, which will generally provide reasons for…upgrading over the next few years.” JPMorgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.
He added that “the release of AI features on Macs, iPads and iPhones will support the improvement cycle across all devices.”
The announcements cap a month of excitement for the stock, as some news was already circulating, including a rumored partnership with ChatGPT operator OpenAI.
After a brief takeover by Nvidia ( NVDA ) , the iPhone maker’s stock is now back as the world’s second most valuable company (behind Microsoft) with a market cap of more than $3.1 trillion.
Apple shares have risen more than 15% in the past two months after a slow start to the year amid concerns about slowing iPhone demand. Analysts like Luria and Chatterjee believe that the next iPhone upgrade cycle could be on the horizon as the new AI features are only coming to the iPhone 15 pro and later generations.
“When people buy new phones this holiday season, they’re going to see this great functionality,” Luria said. “They will show their friends and family, and the product improvement cycle will happen over the next few months and quarters.”
According to Luria, this should be a major catalyst for the stock moving forward.
“Shares were flat because of the lack of revenue growth at Apple,” Luria said. “We now think this will allow Apple’s overall growth to accelerate from the low single digits to the mid to high single digits over the next year or two. That could drive Apple stock.”
Josh Schafer is a reporter for Yahoo Finance. Watch it on X @_joshschafer.
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