Apple investors look for AI to power next leg of gains

Apple shares, for their part, have largely managed to defy gravity for much of the last two years despite the lack of a fulfilled AI offering, unlike many of its biggest rivals. Photo by NurPhoto/Getty Images

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The event, which begins Monday at Apple’s headquarters, is expected to showcase a highly-anticipated update to its Siri digital assistant, along with other AI features. That could act as a major catalyst for the stock, which has quietly become the second-best performing Magnificent Seven firm this year despite the market’s increased fixation on all things AI.

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It would serve as a moment of redemption for the Cupertino, California based firm, which first previewed its AI features in 2024 but subsequently experienced a number of high-profile delays. Investors and analysts are looking for reassurance that it’s finally on track to be released and can help drive future sales of its flagship line of phones.

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“I’ve become more confident Apple can deliver on AI, but we do need to see it execute for me to feel more comfortable underwriting more durable long-term growth,” said Kyle Levins, information technology analyst at Harding Loevner.

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“There’s potential for AI to really accelerate the iPhone upgrade cycle, and if we get a sense that this cycle is going to be bigger, longer, and more durable on account of AI, then I think we can expect to see more upside in the stock.”

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Many analysts are optimistic that a strong AI showing at WWDC will support further gains for Apple shares. Morgan Stanley analyst Erik Woodring said a “polished AI platform and clear Agentic vision” could accelerating iPhone upgrades and lifting Services monetization, driving the stock to as high as $440, more than 40 per cent above where it closed Friday.

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Woodring called the event a “a pivotal catalyst to reframe Apple as an ‘AI winner,’” adding that for other companies, “being seen an ‘AI Winner’ drives a clear inflection in fundamentals, valuation, and sometimes both.”

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Apple shares, for their part, have largely managed to defy gravity for much of the last two years despite the lack of an AI offering, unlike many of its biggest rivals. That outlier status has helped buoy the stock during AI-fuelled selloffs without alienating it from investors as markets ripped higher. The stock has climbed 13 per cent this year, putting it on track for a fourth consecutive year of gains.

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Execution on the AI features, along with “excitement relative to material redesign across the product line-up later in the year” could mean the stock delivers its “typical outperformance through mid-September,” JPMorgan Chase & Co. analyst Samik Chatterjee wrote in a note to clients last week.

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Others are more skeptical. UBS analyst David Vogt expects the AI features “will be interesting use cases for consumers but are unlikely to drive material iPhone demand.”