Wedbush analyst Dan Ives predicted that Apple Inc. (NASDAQ:AAPL) and Microsoft Inc. (NASDAQ:MSFT) could see their valuations exceed $4 trillion in the next 12 months thanks to their AI-driven advances.
What Happened: Ives raised his price target on Apple to $275, which would represent a 47% upside from the current stock price. He called the WWDC event on June 10 the company's “most important event in a decade” and predicts a series of AI announcements.
“In our view, introducing AI to the all-important developer community and laying the foundation for bringing generative AI to consumers starts with Apple,” Ives said.
See also: Jensen Huang is bullish about Nvidia's future, but report says his fast-growing $2.5 trillion AI business faces challenges from rivals and market forces
These features will likely be integrated into the iPhone 16 when it launches in September, which could spark a “growth renaissance” as more users upgrade their iPhones. Ives predicts that the iPhone upgrade cycle will exceed 270 million units.
“For Cook and Cupertino, we believe the Apple iPhone AI moment has now arrived.”
We believe the Apple iPhone AI moment has now arrived for Cook and Cupertino @SquawkStreet 🔥🏆🍿🐂📺📱🍎🍏👇 https://t.co/Z6dBjR1vY8
— Dan Ives (@DivesTech) May 24, 2024
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He also cited favorable supply chain channel checks in Taiwan, suggesting that Apple's April sales were about 2% above consensus, further supporting his belief that the upcoming iPhone 16 upgrade cycle will outperform the current Street numbers for FY25.
Ives isn't just bullish on Apple; he also believes Microsoft's stock price could rise by more than 25% over the next 12 months, sending its market capitalization past $4 trillion.
“We believe that a year from now we will have our AI 1995 moment and add both Microsoft and Apple to the $4 trillion club.”
A year from now, we think the AI 1995 moment will see both Microsoft and Apple join the $4 trillion club @SquawkStreet 🏆🕺🐂🍿📺🍎👇 https://t.co/Z6dBjR1vY8
— Dan Ives (@DivesTech) May 24, 2024
Why it matters: Ives' prediction is in line with his previous statements about Apple's potential in the AI space. In April, he described WWDC as a “pivotal moment” for Apple's AI future and cited the company's “best installed base in the world” for AI. This latest prediction suggests that Apple is poised to achieve significant growth in the coming years by leveraging its AI capabilities.
Meanwhile, Apple's potential AI-driven “supercycle” stands in stark contrast to Microsoft's AI advances in the hardware space.
Microsoft recently touted its AI-enabled Surface notebook as 58% faster than the M3 MacBook Air, highlighting its superior AI capabilities. The competition between these tech giants in the AI field is likely to intensify in the coming years.
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Disclaimer: This content was produced in part with collaboration from Benzinga Neuro and was reviewed and published by Benzinga editors.
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