Apple stock climbed to a new record high price of $207.15 per share, closed up 7% on Tuesday. The rise in Apple share price came a day after the company announced its long-awaited push into artificial intelligence at its annual developer conference on Monday. Apple introduced a range of new AI features during the event.
The Apple AI features to boost sales, included an overhaul of its voice assistant Siri, integration with OpenAI’s ChatGPT, a range of writing assistance tools and new emojis that can be customized. The company pitched the features as AI for the average person, though users will likely need to upgrade their iPhones to access the tools.
Apple stock climb a record high
The rally comes as a breather for the stock, that has underperformed versus the benchmark S&P 500 this year, as Apple grapples with weak sales for its premium consumer gadgets.
With Tuesday’s share price rise, Apple bested its previous record from Dec 14. The company’s developer conference came as a welcome sign for investors who have been watching to see how Apple will capitalize on the ongoing AI boom.
Analysts from Morgan Stanley said Apple’s AI features strongly position the company with “the most differentiated consumer digital agent.” Additionally, the analysts believe that the features will drive consumers to upgrade their iPhones, which should “accelerate device replacement cycles.”
Apple’s valuation
Apple stands to add $180 billion to its market valuation if the current stock price of $205 holds.
At $3.15 trillion, Apple’s market valuation is just $40 billion shy of Microsoft’s, the world’s most valuable company. Nvidia, the largest benefactor of a boom in AI applications and number three in terms of market valuation, is at $2.93 trillion.
AI can boost sales for Apple
As per the analysts Apple will still have to deliver when the AI features are first available in the fall, but they think the “building blocks are in place for a return to growth and more sustained outperformance.”
“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 in a note Tuesday.
Bank of America analysts were also optimistic about Apple’s announcements, saying the features will lead to “an upgrade cycle for AI-enabled IntelliPhones.” The analysts maintained their buy rating on the stock due to the promise of a multiyear upgrade cycle, potential for gross margin upside and services growth.
