Here’s Why We’d Wait to Buy Apple at the Moment
The artificial intelligence story just got even hotter.
All after Apple introduced a range of new AI feature, including an upgrade to its voice assistant Siri, integration with Open AI’s Chat GPT, and new writing assistance tools. Loving the news, investors sent AAPL up more than $12 a share yesterday, and another $6 today.
As noted by CNBC, “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.’”
Evercore said they came away from the conference with “increased confidence” in Apple’s AI strategy, particularly because they believe it will push users to upgrade their devices. Even Bank of America was optimistic, believing the news could lead to an early iPhone upgrade cycle.
And, as noted by Wedbush, “The delayed positive reaction from the Street on the Apple
Intelligence news was investors starting to fully digest that the AI Revolution will come through the consumer with an Apple device over the coming year,” as quoted by Barron’s.
While the news is exciting, we’d wait to buy Apple, which has become a bit overbought. We’d wait to buy on its next healthy pullback.
Helping, even after months of AI excitement, the story isn’t showing any signs of cooling.
Instead, according to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030.
Plus, consider this. Artificial intelligence-related spending will make up about 8% to 10% of IT budgets in 2024, according to Wedbush. “This demonstrates a remarkable acceleration in AI spending after it comprised less than 1% of IT budgets in 2023,” added Seeking Alpha.
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Written by Ian Cooper