Apple shares hit record high after AI announcements

Shares of Apple ( AAPL ) rose 7% on Tuesday to hit a record high for the first time in 2024 as investors digested the announcement of its AI platform Apple Intelligence.

After the stock fell on Monday during and after the company’s WWDC conference, it posted its best single-day performance since November 2022 as some Wall Street analysts cheered the company’s announcements.

“If you separate the signal from the noise, you understand that this is an unprecedented capability that Apple is going to introduce, and it’s going to integrate AI into everyday life,” DA Davidson managing director Gil Luria told Yahoo Finance (video above).

Following Monday’s event, Luria upgraded Apple to Buy from Neutral and raised his price target to $230 from $200.

On Monday, Apple announced “Apple Intelligence,” its long-awaited foray into the generative AI space. The company said the platform will be integrated across the company’s hardware and software products, from iPhone and Mac to Mail, Messages and Photos. Apple Intelligence will be available for the iPhone 15 Pro and iPads and Macs powered by Apple’s M1 series chips.

Key features of the release include updates to Siri, which can, for example, scan phones for addresses sent in messages or find photos in a phone’s photo library based on voice prompts. Apple also introduced new software updates for its iPhone, watches and computer products.

“Our experience with consumer surveys accompanying previous generation iPhone introductions suggests that the hardware upgrade cycle is driven more by a set of feature upgrades across various applications, which collectively will provide reasons to upgrade over the next few years.” JP Morgan senior analyst Samik Chatterjee wrote in a note to clients on Monday.

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“The rollout of AI features across Macs, iPads and iPhones will support the upgrade cycle across all devices,” he added.

The announcements capped a month of excitement for the stock, as rumors had already swirled about some of the news, including a partnership with ChatGPT operator OpenAI.

After being briefly overtaken by Nvidia ( NVDA ), the iPhone maker’s stock has now returned to the world’s second-most valuable company (behind Microsoft) with a market capitalization of more than $3.1 trillion.

CUPERTINO, CALIFORNIA - JUNE 10: Apple CEO Tim Cook delivers remarks at the opening of the Apple Worldwide Developers Conference (WWDC) on June 10, 2024 in Cupertino, California.  Apple will announce plans to incorporate artificial intelligence (AI) into Apple software and hardware.  (Photo by Justin Sullivan/Getty Images)

Apple CEO Tim Cook delivers remarks at the start of the Apple Worldwide Developers Conference (WWDC) on June 10, 2024 in Cupertino, California. (Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)

Apple’s stock is now up more than 15% in the past two months, following a slow start to the year amid concerns about slowing iPhone demand. Analysts like Luria and Chatterjee believe that the next iPhone upgrade cycle is on the horizon, with new AI features only coming to the iPhone 15 Pro and later generations.

“As people buy new phones this holiday season, they’re going to see this great functionality,” Luria said. “They’re going to show their friends and family and the product upgrade cycle will happen over the next few months and quarters.”

This, Luria argued, should be a major catalyst for the stock moving forward.

“The lack of revenue growth at Apple has left the stock flat,” Luria said. “Right now, we think that will allow Apple’s overall growth to accelerate from the low to mid-single digits, maybe even the high single digits in the next year or two. That’s what could drive Apple’s stock.”

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Josh Shafer is a Yahoo Finance reporter. Follow him on X @_joshschafer.

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