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Apple Inc. (AAPL) shares soared by 5% to an all-time high of approximately $203 per share on Tuesday, following the company’s announcement of new AI software during its annual developer conference held on Monday.
At the event, Apple CEO Tim Cook unveiled a range of groundbreaking AI features, marking the company’s long-anticipated foray into the artificial intelligence landscape. Key announcements included a revamped Siri voice assistant, integration with OpenAI’s ChatGPT, various writing assistance tools, and new customizable emojis. These features are designed to offer accessible AI capabilities to the average user, although an iPhone upgrade will be necessary to access the new tools.
The stock surge on Tuesday surpassed Apple’s previous record set on December 14. This developer conference has been a pivotal moment for investors who have been eager to see how Apple plans to leverage the booming AI industry.
Morgan Stanley analysts commented that Apple’s new AI offerings position it as having “the most differentiated consumer digital agent.” They also noted that these features are likely to drive iPhone upgrades, potentially accelerating the device replacement cycle.
“Following a WWDC that delivered on the key details we were focused on heading into the event, we have even greater conviction that Apple is on the cusp of a multi-year product refresh that underpins our Overweight rating, $216 price target, and $270 bull case valuation,” the analysts stated in a note on Tuesday.
Bank of America analysts echoed this optimism, highlighting that the new AI capabilities could spark an “upgrade cycle for AI-enabled IntelliPhones.” They upheld their buy rating on Apple stock, citing prospects of a multi-year upgrade cycle, potential for gross margin improvements, and growth in services.
Evercore analysts expressed increased confidence in Apple’s AI strategy following the conference. They emphasized that restricting Apple Intelligence to recent iPhone models strengthens the belief that AI advancements could trigger an iPhone super cycle.
“Restricting Apple Intelligence to iPhones sold within the last year adds to our conviction that AI can help kick off an iPhone super cycle,” the analysts noted in a report on Monday.
The new AI features are set to be available to users this fall, and while Apple still needs to deliver on these promises, the company has laid a strong foundation for future growth and continued market dominance.
