Apple (NASDAQ:AAPL) stock is in the news for bolstering its artificial intelligence (AI) capabilities ahead of the Q2 conference call. The company will announce its Q2 financials on Thursday, May 2. In the latest development, Bloomberg reported that Apple is in discussion with Microsoft (NASDAQ:MSFT)-backed OpenAI to integrate its AI capabilities into the upcoming iPhone model.
It’s worth highlighting that Apple came under fire for its slow progress in AI advancements. Consequently, the tech giant is actively seeking partnerships and acquiring smaller firms to enhance its AI prowess.
Last week, a French news outlet, Challenges, reported that Apple had acquired Datakalab, a Paris-based AI startup. Earlier this year, Apple acquired DarwinAI. Further, the company has been exploring a potential collaboration with Alphabet’s (NASDAQ:GOOGL) Google to leverage the latter’s AI model into its products. It remains to be seen whether Apple partners with Google or OpenAI.
Q2 Expectations
Wall Street expects Apple to post revenue of $90.34 billion in Q2, down from $94.8 billion in the prior-year quarter. Concerns over iPhone sales, primarily in China, declining iPad sales, and ongoing softness in the Wearables, Home, and Accessories segment will likely remain a drag. Nonetheless, strength in its Services segment is likely to support its top line.
Lower sales will likely impact its bottom line in the second quarter. Analysts expect Apple to post earnings of $1.5 per share, down from $1.52 in the prior-year quarter.
Is Apple a Buy, Hold, or Sell?
Apple stock has lost about 12% of its value as a result of weaker hardware sales and slow progress in AI. Wall Street analysts are cautiously optimistic about its prospects.
It has a Moderate Buy consensus rating, reflecting 17 Buys, 12 Holds, and two Sell recommendations. Analysts’ average price target on AAPL stock is $200.71, which implies 18.55% upside potential from current levels.
