The fusion of sleek hardware and user-friendly, cutting-edge technology has been the hallmark of Apple (NASDAQ:AAPL) from the company’s very beginning.
Now, as the fast-paced race for advanced AI surges into the future, Apple seeks to further entrench its market-leading position by securing a partnership with one of the most notable innovators in this game-changing field.
Recent reports indicate that Apple is on the verge of signing a deal with OpenAI, the creators of ChatGPT. This partnership could significantly enhance AI services for Apple’s billions of users, as the world’s largest smartphone maker plans to integrate OpenAI’s features into its upcoming iOS and iPhone offerings.
Wedbush analyst Daniel Ives is enthusiastic about these developments, stating, “Inking a partnership with OpenAI opens up a myriad of paths and revenue opportunities on the Services front that Apple can take this technology and ChatGPT features on the iPhone. We expect exclusivity around a number of these advanced AI OpenAI features on the iPhone that Apple will build around a broader AI strategy on iPhone 16 and iOS 18.”
Leveraging OpenAI technology will not only enhance Apple’s AI tools but also create additional revenue growth opportunities through subscription fees.
“We would expect Apple to build out a next level Siri technology with OpenAI that can do complex tasks for Apple users and more advanced features that will eventually be a separate monthly subscription service along with other AI features,” Ives explained.
The partnership is expected to be formally announced at the Worldwide Developers Conference next month. In the meantime, Ives reaffirms his Overweight (i.e., Buy) rating on Apple shares while maintaining his 12-month price target at $250. If achieved, this target would represent gains of ~32%. (To watch Ives’ track record, click here)
What does the rest of the Street think? Looking at the consensus breakdown, opinions from other analysts are more spread out. 20 Buys, 11 Holds and 1 Sell add up to a Moderate Buy consensus. In addition, the $204.28 average price target indicates ~8% upside potential. (See AAPL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
