Apple shares experienced their best day since May 5, 2023, climbing 4.3% to a share price of $175.04 on Thursday. The surge came amid a strong day for technology stocks, particularly those involved in artificial intelligence, as the Nasdaq Composite rose 1.77%. Despite being down more than 5% year-to-date, Apple's recent stock slide has contributed to improving sentiment among hedge fund investors, according to JPMorgan analysts.
In a research note on Thursday, JPMorgan analyst Samik Chatterjee suggested that investors may be more comfortable with Apple's current valuation following recent losses and the potential to benefit from AI. The analysts predicted a strong iPhone sales cycle in 2026 due to forthcoming AI features, with Apple CEO Tim Cook recently hinting at an AI announcement later this year, likely during the company's Worldwide Developers Conference event in June.
"Hedge fund investors are increasingly warming up to the opportunity of the AI upgrade cycle, but the uncertainty still pertains to whether the upgrade cycle starts with iPhone 16 in September 2024 or iPhone 17 in September 2025," Chatterjee wrote.
In addition to the AI-related optimism, Bloomberg reported on Thursday that Apple is preparing to overhaul its entire Mac lineup with next-generation "M4 chips" that emphasize AI capabilities. Citing people with knowledge of the matter, the report suggests that Apple aims to release the updated computers in late 2023 and early 2024, including new iMacs, a low-end 14-inch MacBook Pro, high-end 14-inch and 16-inch MacBook Pros, and Mac minis.
The PC industry has been grappling with a slump since the end of the pandemic-era boom in sales for working and learning from home. However, the industry is pinning its hopes on a revival driven by a new generation of laptops and desktops with more powerful chips capable of handling artificial intelligence tasks, such as summarizing documents without relying on cloud-based data processing.
Apple's rivals, including Intel, Qualcomm, and Nvidia, are also preparing AI-focused chips for the PC market. Reuters has reported that Nvidia plans to leverage its strength in AI chips to enter the PC market with a new chip as early as 2025.
According to the Bloomberg report, Apple plans to highlight the AI processing capabilities of the new M4 chips and how they will integrate with the next version of macOS. The news comes ahead of Apple's annual developers conference in June, where the company is expected to announce new AI partnerships and unveil significant changes to the iOS operating system.
Apple declined to comment on the Bloomberg report, but the news has already generated excitement among investors and industry observers. The company's Mac sales fell 27% in its most recent fiscal year ended September, and the introduction of AI-focused M4 chips across the entire Mac lineup could provide a much-needed boost to the segment.
As Apple continues to invest in AI and prepares to roll out its next-generation M4 chips, the company appears well-positioned to capitalize on the growing demand for AI-enabled devices and services. The recent surge in Apple's stock price reflects the improving investor sentiment and the company's potential to remain at the forefront of the AI revolution in the consumer electronics market.
