Apple (NASDAQ: AAPL) is the world’s most valuable company right now with a market cap of nearly $3.3 trillion, but the tech giant’s shares have underperformed some of the other big names in tech so far this year.
Apple, with Amazon, Nvidia, Microsoft, Alphabet, Meta-platformsAnd Teslaare the seven largest technology-focused companies that have played a central role in the stock market’s rally over the past year and a half. They are collectively known as the “The Magnificent SevenIt is worth noting that some of them, such as Nvidia, Meta and Alphabet, have recorded larger gains than the market in 2024.
However, it won’t be surprising to see Apple stock step on the accelerator in the latter stages of 2024 and eventually reach the $4 trillion market cap mark, or 21% of its current valuation.
Artificial intelligence expected to boost Apple sales
Apple has yet to launch any smartphones with artificial intelligence (AI) while rivals like Samsung and other Chinese OEMs have already jumped on the bandwagon. However, that is set to change next month when the company launches its next-generation iPhones, which are expected to support the company’s suite of generative AI features, known as Apple Intelligence.
The tech giant introduced Apple Intelligence in June this year, noting that the platform will be “deeply integrated into iOS 18, iPadOS 18, and macOS Sequoia.” has a multitude of generative AI features This could trigger a new upgrade cycle, encouraging users of older devices to upgrade to the latest iPhones.
JP Morgan Analyst Samik Chatterjee believes the next iPhone will mark the beginning of a new upgrade cycle that will last beyond Apple’s 2025 iPhone generation. Specifically, the analyst estimates that Apple could see a 10% increase in iPhone sales in fiscal 2025, to 244 million units. Apple’s fiscal 2025 begins late next month and will coincide with the launch of its AI-powered iPhones.
JP Morgan predicts that iPhone sales will reach 268 million units in fiscal 2026, indicating that the upgrade cycle will intensify when the company updates its lineup next year. The good news for Apple investors is that the iPhone isn’t the only device that’s getting a dose of AI injection. Apple Intelligence will also be available on MacBooks.
These markets could open up a new opportunity for robust growth for Apple. For example, the market for personal computers (PCs) with generative artificial intelligence is expected to grow from 48 million units shipped annually in 2024 to 205 million units in 2028. The addition of Apple Intelligence to the company’s Mac operating system positions it well to capitalize on this long-term secular growth opportunity.
All of this indicates that Apple could be at the beginning of a new growth curve that could eventually help the stock regain momentum and move higher in the long term. However, a closer look at recent sales…
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