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Apple (NASDAQ:AAPL) is slated to host its annual developer conference next week, an event that Wedbush Securities believes will be the start of an “artificial intelligence driven growth cycle” for the tech giant.
“In our view WWDC represents the most important event for Apple in over a decade as the pressure to bring a generative AI stack of technology for developers and consumers is front and center with [Tim] Cook & Co. set to make history for Cupertino next Monday,” analyst Dan Ives wrote in an investor note. “We believe AI technology being introduced into the Apple ecosystem will bring ample monetization opportunities on both the services as well as iPhone/hardware front and adds $30 to $40 per share to the Cupertino growth story as the vision starts to play out within the golden installed base of 2.2 billion iOS devices.”
Ives has an Outperform rating and $275 price target on Apple.
Among the AI-related announcements Ives is expecting Apple to make include the formal announcement of a deal with generative AI startup OpenAI to power on-device Apple’s large language models. Apple may also unveil large language models that are powered securely via the cloud using its own processors, Ives posited.
Apple could also “lay the foundation” for an AI App Store, with developers building consumer-focused apps on top of the AI tech stack that Apple has worked on, Ives said.
And while the upcoming version of iOS is expected to have a number of AI features, Apple’s release in just a few short months could be more important. Ives said the next version of the iPhone (to be released in September) may have some “exclusive” AI features “that sets up for a renaissance of growth that will spark a massive overdue upgrade cycle into 2025.”
Apple’s developer conference is set to kick off on Monday with a keynote address at 1 p.m. EST.
