The stock price of Apple, the iPhone manufacturer, showed an increase of nearly 3% ahead of its earnings announcement. This was driven by expectations that ChatGPT could be integrated into Apple devices. Investment bank Bernstein also upgraded its investment rating on Apple.
On Monday the 29th (local time) in the New York stock market, Apple's stock closed at $173.50 per share, up 2.48% from the previous session. During the day, it briefly rose more than 3%, surpassing the $176 mark. This is the highest level in two weeks since the 15th. Apple's stock also showed a slight upward trend in after-hours trading following the regular session close.
This stock price increase is analyzed to be due to expectations that OpenAI's generative artificial intelligence (AI), ChatGPT, could be integrated into Apple devices such as the iPhone. Apple plans to equip the iPhone, launching in the second half of this year, with features based on large language models. Earlier, Bloomberg reported that Apple resumed discussions with OpenAI for some new features to be included in the iPhone by the end of this year. Additionally, Apple is also in talks with Google regarding the integration of Gemini.
On the same day, investment bank Bernstein’s upgrade of Apple’s investment rating from 'Neutral' to 'Buy' also supported the upward momentum of the stock price. Bernstein viewed that Apple’s stock had fallen excessively due to weak iPhone 15 sales and slowing revenue in China, and maintained a 12-month target price of $195 for Apple. This implies an expectation of more than a 15% additional increase in the stock price going forward.
Furthermore, Bernstein forecasted strong sales for the iPhone 16, which will be released in the second half of this year, driven by the iPhone replacement cycle and the addition of generative AI features by Apple. Tony Sacconaghi, a Bernstein analyst, said, "Expectations for Apple’s fiscal second-quarter earnings are low, and third-quarter revenue forecasts are likely to fall short of market expectations," adding, "The fear is gone." Apple will announce its quarterly earnings on the 2nd of next month.
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