(BFM Bourse) – The apple group signed an impressive increase of 7.26% on Tuesday, its strongest since November 2022, arriving at a record of 207.15 dollars. This progression brings the smartphone manufacturer to around forty billion dollars of Microsoft, the world’s largest market capitalization.
It’s been a long time since Apple had such a good session. Since November 10, 2022 (+8.9%) exactly, according to data from investing.com.
The Apple group posted an increase of 7.25% on Tuesday, driven by comments from enthusiastic analysts following the presentation of its advances in artificial intelligence (AI) at its annual developers conference. .
This increase allowed it to add no less than $215.1 billion in market capitalization (the value of all of a company’s shares), according to Bloomberg. With 3.176 billion dollars in total, Apple regained its place as the second largest stock market group in the world from Nvidia, with a gap of more than 200 billion dollars.
Above all, the Apple group is getting closer to Microsoft ($3.215 billion). In pre-market trading, however, Apple lost 0.7% around 2:30 p.m. when the Redmond company rose 0.5%, ready to consolidate its small lead.
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The “upgrade cycle in question”
The rally was therefore triggered by the new products presented by the Cupertino company on Monday evening. Apple announced a partnership with OpenAI, which will allow the Siri interface to probe ChatGPT to respond to user queries. The group also unveiled several AI features, with its own technology, called “Apple Intelligence”. This will notably help the user in writing notes, emails or making Siri more proactive and multitasking.
This event, initially greeted with circumspection by the market, finally convinced Wall Street. Apple responded to the expectations of the most optimistic analysts. They hope that advanced AI technologies will support iPhone sales because they will trigger an “upgrade cycle” as users choose to acquire new smartphones fuel to AI to replace their old model.
Bank of America thus appreciated the presentation, maintaining its purchase recommendation and its price target of 230 dollars (compared to a price currently around 203 dollars). “In our opinion, AI functions can lead to an ‘upgrade cycle’ towards IntelliPhones (smartphones running on AI, Editor’s note),” judges the American establishment.
“The addition of artificial intelligence functions to the latest iPhone comes at an ideal time for Apple,” writes Walter Piecyk, analyst at LightShed, quoted by Bloomberg. “iPhone revenues have stagnated and the vast majority of its installed base consists of old phones as the ‘upgrade cycle’ has slowed to a record low. So it should be easy for Apple to stimulate a stabilization or reversal of the replacement cycle which is lengthening,” he adds.
Dan Ives, an analyst at Wedbush, estimates that of the installed base of 1.5 billion iPhones, 270 million devices are more than four years old. Which therefore bodes well for the renewal cycle among buyers.
“Developers will now create hundreds of apps from Apple’s AI stack, creating a new AI App Store in the coming years that will be the primary way for consumers to interact with the Generative AI”, he also considers.
The analyst judges that both Apple, Microsoft and Nvida will approach $4,000 billion in market capitalization by the end of 2025.
Julien Marion – ©2024 BFM Bourse
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