Tech

Apple Stock Hits $203 on AI Buzz, Analysts See $270 Target

Apple stock hits new all-time high of $203, adding $500 billion to market cap after AI announcements at WWDC.

By Bill Bullington

6/11, 14:34 EDT
Apple Inc.
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Key Takeaway

  • Apple’s AI announcements at WWDC, including Siri overhaul and Genmoji, drove a 6% stock surge to an all-time high of $203.
  • Analysts from Morgan Stanley and Bank of America are optimistic about a multi-year iPhone upgrade cycle, with price targets up to $270.
  • Despite some skepticism from UBS and Barclays, overall sentiment is positive on Apple's AI strategy boosting future growth.

Apple’s AI Announcements

Apple Inc. made significant strides into the artificial intelligence (AI) space during its annual Worldwide Developers Conference (WWDC) on Monday. The company unveiled Apple Intelligence, a suite of AI tools that will be integrated into Mac, iPhone, and iPad devices. Key features include an overhaul of the Siri voice assistant, integration with OpenAI’s ChatGPT, and new customizable AI-powered emojis called Genmoji. These announcements come as Apple aims to capitalize on the ongoing AI boom that has propelled other tech giants like Nvidia to record highs.

Morgan Stanley analysts noted that Apple’s AI features position the company with “the most differentiated consumer digital agent.” They believe these features will drive consumers to upgrade their iPhones, potentially accelerating device replacement cycles. “Following a WWDC that delivered on the key details we were focused on heading into the event, we have even greater conviction that Apple is on the cusp of a multi-year product refresh that underpins our OW rating, $216 price target, and $270 bull case valuation,” the analysts wrote.

Bank of America analysts also expressed optimism, stating that the new AI features will lead to “an upgrade cycle for AI-enabled IntelliPhones.” They maintained their buy rating on the stock, citing the promise of a multi-year upgrade cycle, potential for gross margin upside, and services growth.

Stock Performance

Apple shares experienced a notable rebound following the WWDC announcements. On Tuesday, the stock surged more than 6% to a new all-time high of around $203 per share, surpassing its previous record from December 14. This rally added more than $500 billion to Apple’s market capitalization, bringing it back above the $3 trillion mark. Despite this recent surge, Apple’s stock has underperformed both the S&P 500 and the tech-heavy Nasdaq Composite this year, with a gain of just over 6%.

D.A. Davidson analyst Gil Luria upgraded Apple’s stock to buy from neutral, citing the potential for a much-needed iPhone upgrade cycle driven by the new AI features. “Apple has not only the consumer’s information, but also their trust, it can deliver the above deeply integrated functionality in a way that standalone chat applications, PCs, and Android devices may not be able to fully replicate,” Luria wrote.

Analyst Perspectives

Wall Street analysts generally view Apple’s AI announcements positively, though some express caution. Goldman Sachs analyst Michael Ng was “encouraged by the financial implications” of the new AI features, noting that they should help fuel an iPhone upgrade cycle and create opportunities for additional AI monetization. Morgan Stanley’s Erik Woodring also sees a setup for a rapid device replacement cycle, forecasting 227 million units in fiscal 2025, rising to 238 million units in fiscal 2026.

Evercore ISI’s Amit Daryanani expects Apple’s lead in silicon to help it handle AI inferencing, while its trove of user data should offer “unique” generative AI optionality. Citigroup analyst Atif Malik called the conference the “best WWDC ever,” highlighting Apple’s advantage in hardware and software integration and its partnership with OpenAI.

However, not all analysts are convinced. UBS analyst David Vogt found the AI announcements “a bit disappointing relative to expectations,” maintaining the view that Apple’s AI strategy will not lead to a significant iPhone upgrade cycle this fall. Barclays analyst Tim Long also viewed the AI announcements as “more of an evolution” and not a significant catalyst for the stock, noting the lack of new hardware announcements.

Street Views

  • Morgan Stanley Sales Team (Bullish on Apple):

    "Over the last 10 years, about half of the megacap tech stock’s outperformance against the broad S&P 500 has come in the three months following the annual worldwide developers conference."