Investors and techies alike are eagerly anticipating June’s Worldwide Developers Conference, where Apple (NASDAQ:AAPL) is slated to unveil its plans for the AI space. Reports of potential partnerships with OpenAI (makers of ChatGPT) and Google are swirling, driving up excitement for CEO Tim Cook’s keynote address.
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Meanwhile, Apple’s stock has been on a bullish trend lately, buoyed by the prospect of integrating advanced AI features into its extensive ecosystem of 2.2 billion active devices. After hitting a 52-week low in mid-April, AAPL has seen its shares rise ~15%.
Indeed, future AI integrations are some of Apple’s many reasons for good cheer, according to Tigress Financial’s Ivan Feinseth, a 5-star analyst rated in the top 3% of the Street’s stock pros.
Feinseth expects the AI features to unleash a significant product upgrade, noting, “With the upcoming operating system upgrades and new product introductions, AAPL will increasingly incorporate AI functionality across its product lines, driving increasing demand and a massive upgrade cycle.”
The new software signifies major changes, as the “iOS 18 update is expected to be one of the most extensive iPhone software upgrades in company history.”
Sleek new hardware is also part of the picture, as new models of iPads and MacBooks having recently been introduced. In particular, new versions of the iPad Pro and iPad Air – which Apple showcased at its Let Loose product introduction in May – represent the first significant improvement for the iPad since 2018.
Increasing demand from China is another bright spot for the tech giant, writes Feinseth, with year-over-year iPhone sales from April up 52%, which followed sluggish numbers from earlier in the year.
Feinseth is less concerned about the company’s Q2 revenues, which at $90.8 billion were down 4% year-over-year. The analyst expects that improving iPhone sales and the new product announcements will lead to return to growth for Apple.
What does this all mean for investors? “AAPL remains a must-own stock,” Feinseth concludes.
Not surprisingly, the analyst rates Apple shares a Strong Buy rating, while slightly lifting his 12-month price target on the stock to $245 (from $240). At current levels, that target represents ~28% potential upside. (To watch Feinseth’s track record, click here)
Looking at the consensus breakdown, the optimists out gun the doubters. Based on 22 Buys, 11 Holds and a single Sell, AAPL stock has a Moderate Buy consensus rating. Given the $207.72 average price target, the shares are anticipated to be changing hands for a 9% premium a year from now. (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.
