Apple Intelligence- stock price reached an all-time high on Monday, fuelled by a combination of positive analyst sentiment and the company’s recent foray into artificial intelligence (AI).
Morgan Stanley Names Apple a “Top Pick” Citing AI Efforts
Morgan Stanley, a major investment bank, played a key role in the stock’s surge. They upgraded Apple to a “top pick” and raised their price target on the company’s shares, citing Apple Intelligence as a significant driver for future iPhone and iPad sales.
Apple Intelligence, unveiled last month, is seen as companies answer to advancements in AI made by competitors like Google’s AI unit, Deep Mind, and Microsoft-backed OpenAI. This new technology is expected to incentivize users to upgrade their devices to experience its functionalities.
Stock Reaches Record High, Market Value Tops $3.6 Trillion
The positive analyst outlook, coupled with excitement surrounding Apple Intelligence, sent stock price soaring by 2.5%. This increase pushed the share price to a record high of $236.30, propelling market value to a staggering $3.62 trillion – the highest market value of any company in the world.
Analysts at Morgan Stanley believe Apple Intelligence will be a significant catalyst for future device sales. They project that the technology, currently compatible with only 8% of existing iPhones and iPads, will drive significant upgrades. With an estimated 1.3 billion iPhones currently in use, Morgan Stanley predicts they could sell nearly 500 million new iPhones in the next two years.
This bullish outlook is a significant revision from their previous estimates. Previously, Morgan Stanley anticipated to sell between 230 million and 235 million iPhones annually over the next two years. The increased optimism reflects their belief in the transformative power of Apple Intelligence.
CRUCIAL QUOTE: 1.3 billion iPhones in use (highest ever), users holding onto them for 4.8 years (longest ever), and new AI tech restricted to just 8% of devices (smallest compatible user base ever).https://www.forbes.com/sites/dereksaul/2024/07/15/apple-stock-hits-record-high-on-ai-iphone-anticipation—as-analysts-predict-5-trillion-valuation/
Analyst Consensus Favours Apple, Outperforming Market
The stock boasts an average analyst rating of “buy” with a median price target of $217. This indicates that most analysts foresee continued growth. Additionally, apple’s stock performance has outshined the broader market this year, surpassing the S&P 500 index.
Apple and Samsung Poised to Lead Global Smartphone Market Recovery
Industry analysts predict that Apple and Samsung will be frontrunners in the global smartphone market recovery. This optimistic outlook is fuelled by the growing interest in smartphones equipped with next-generation AI capabilities, like those promised by Apple Intelligence.
While Apple’s smartphone sales experienced a slight year-on-year increase in the quarter ending June, their market share did see a dip. IDC data reveals that Apple sold 45.2 million smartphones globally in the past quarter, up from 44.5 million the previous year. However, their market share fell from 16.6% to 15.8% during the same period.
Despite the market share dip, the overall sentiment surrounding Apple remains positive. The company’s strategic push into AI, coupled with strong analyst support, suggests that Apple is well-positioned to capitalize on the growing demand for AI-powered devices.
Apple Reports 35% Growth in India Sales, Reaches Rs 67,000 Crore ($8 billion)
Apple Inc. is set to announce a 35% year-on-year increase in its India revenue for 2023-24, reaching nearly Rs 67,000 crore ($8 billion). This follows a strong performance in FY23, where they reported Rs 49,332 crore ($6 billion) in revenue, up 48% from FY22’s Rs 33,381 crore ($4 billion). Profit in FY23 also saw a substantial rise of 76.5%, totaling Rs 2,230 crore.
India is becoming a crucial market , as they shifts more iPhone production from China. With exports from India surpassing $10 billion in FY24, the country now accounts for 14% of thr iPhone production value. Company aims to boost this share to 23-25% by FY26, utilizing vendors Tata Electronics, Pegatron, and Foxconn under the production-linked incentive (PLI) scheme. The total production value of iPhones in India over the past three years has reached Rs 1,94,800 crore, far exceeding the PLI target of Rs 1,33,493 crore.
Future Outlook
The launch of Apple Intelligence represents a strategic move to capture a larger share of the AI-driven device market. With a vast installed base of iPhones and a loyal customer base, now well-positioned to leverage this new technology to drive sales growth. The strong market performance and positive analyst sentiment further reinforce the company’s prospects for continued success.
In conclusion, record-high stock price and Morgan Stanley’s endorsement underscore the significant impact of the company’s AI efforts. As they continues to innovate and expand its AI capabilities, the potential for increased device sales and market share growth remains promising. With a robust market position and ongoing advancements in technology, Apple is poised to maintain its leadership in the global smartphone market.