'AI Competition Entry' Apple Hits Record High... Wall Street Sees Expanding iPhone Replacement Demand

Stock Price Surges Over 6% to Surpass $200
Wall Street Optimistic, Citing "iPhone Replacement Demand Stimulus"

Apple's stock price surged more than 6% just one day after unveiling its artificial intelligence (AI) service, reaching an all-time high. This reflected the market's high expectations amid Wall Street's anticipation of a surge in iPhone replacement demand to use Apple's first AI service.

[Image source=AFP Yonhap News]

On the 11th (local time), at 3:10 PM in the New York stock market, Apple was trading at $204.92 per share, up 6.11% from the previous trading day. This marked the first time Apple's stock price surpassed $200, reaching an intraday high of $206.03.

With this sharp rise, Apple's market capitalization exceeded $3.14 trillion, comfortably surpassing the $3 trillion mark.

This strong performance in Apple's stock price is analyzed to reflect expectations for Apple's AI service announced at the annual Worldwide Developers Conference (WWDC) that opened the day before.

Apple unveiled its first AI system, 'Apple Intelligence,' the previous day. The company plans to apply Intelligence across all Apple devices including iPhone, iPad, and Mac, and to integrate AI features into operating systems such as iOS and other software updates scheduled for this year. Apple also announced a partnership with OpenAI to incorporate ChatGPT into its voice assistant, Siri.

Despite this declaration of entering the AI competition, Apple's stock price fell 1.91% the previous day, as it was considered to have fallen short of market expectations. However, the following day, Wall Street forecasts that Apple's AI features could lead to increased demand for the latest iPhone models, causing the stock to surge more than 6% intraday.

Morgan Stanley stated, "Apple is strongly positioning itself as the most differentiated consumer digital agent through AI capabilities," adding, "These AI features will encourage consumers to upgrade their iPhones, accelerating device replacement cycles." They further noted, "We have increased confidence that Apple is at the peak of a multi-year product replacement cycle that supports our 'Overweight' investment rating and target price range of $216 to $270."

The market expects that Apple Intelligence will require specifications of at least the iPhone 15 Pro or iPhone 15 Pro Max to operate smoothly. This could significantly stimulate replacement demand for the iPhone 16, expected to be released this fall.

Bank of America (BoA) also predicted that Apple's AI service announcement "will lead to a smart iPhone upgrade cycle enabled by AI usage."

However, skeptical views regarding Apple's AI service have also been raised.

The U.S. economic daily, The Wall Street Journal (WSJ), commented, "The image search and email/message drafting support demonstrated by Apple the day before appear similar to features offered by Microsoft (MS) or Google's AI tools," adding, "Apple's AI evolution is not a revolution. It is questionable how Apple can generate additional revenue from this."