Apple stock has rebounded recently, BofA Securities said, and an upcoming artificial intelligence upgrade for iPhones will boost the shares even more.
Apple shares had a challenging start to the year as investors digested reports of weak demand in China and waited for creative updates from artificial intelligence. It seemed like every other tech company was releasing their plans to get ahead in the GenAI race, but Apple has yet to announce a major update.
But now, the stock is up 16% to hit a low of $165 on April 19, 2024.
Many investors believe Apple will have news to share on the AI front at its Worldwide Developers Conference, or WWDC, starting June 10. “During the key note of the day. This is when the company is expected to announce a largely AI-powered iPhone, which could be a big boon for the stock.
“We see upcoming AI-enabled phones (IntelliPhones) to drive a multi-year upgrade cycle,” BofA Securities analyst Vamsi Mohan wrote in a note on Wednesday.
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“With an installed base of over 4 billion smartphones, we see the opportunity for the next upgrade cycle to be a once-in-a-decade-type event,” he added.
These AI-powered smartphones will offer advanced personal assistance, language processing, health monitoring, enhanced photography, security, battery management and AR/VR experiences, Mohan said. He rated Apple stock Buy with a $230 price target.
Wedbush analyst Dan Ives is also gearing up for WWDC: in a recent note, he called June 10 “Apple's most important event in a decade.” He rates Apple at Outperform with a $275 price target.
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“We believe the introduction of AI technology into Apple's ecosystem will bring substantial monetization opportunities on both services as well as the iPhone/hardware front,” he said in a May 23 note. I would add $30 to $40 per share.”
Apple stock was the best performer.
Dow Jones Industrial Average
Wednesday, up 1.1% to $191.99. Shares are now up 13 percent this month for the stock's best month since July 2022, according to Dow Jones Market data.
Write to Angela Palumbo at angela.palumbo@dowjones.com.