Apple‘s (AAPL) stock has been soaring to new heights, bolstered by the company’s evolution from a hardware-focused entity to a tech giant with a massive, engaged user base of over 1 billion unique users across 2.3 billion devices. Toni Sacconaghi, a senior research analyst at Bernstein, discussed this transition on CNBC’s ‘Squawk Box,’ emphasizing how Apple is now leveraging this installed base to bring artificial intelligence to the masses through its Apple Intelligence initiative and integration with large language models like ChatGPT.
Sacconaghi pointed out that while the recent stock performance might not be solely due to the latest iOS 18.2 beta release, investors are optimistic about the trajectory of Apple’s AI integration. With Apple Intelligence expected to evolve, it’s seen as a key access point for consumers to engage with AI through their iPhones, Macs, or iPads. Despite some market uncertainties, such as questions about AI growth sustainability, tariffs, and antitrust issues with Google, Apple is viewed as a safe investment haven.
He highlighted Apple’s adept management under CEO Tim Cook, who has maintained good relations with both China, crucial for Apple’s manufacturing and sales, and the incoming U.S. administration led by President-elect Donald Trump. This diplomatic skill was showcased when Apple managed to avoid a proposed 10% tariff on smartphones during previous political talks. Sacconaghi suggested that Apple’s status as an iconic American company could offer protection from new tariffs, as they could inadvertently benefit competitors like Samsung.
Regarding the integration of AI into Apple’s products, Sacconaghi noted that while the current features might not be game-changing, there’s a clear path forward for enhancement. Looking ahead to Apple’s fiscal 2026, he predicted a strong iPhone sales cycle driven by better AI capabilities, a new thinner form factor, and an older installed base ripe for upgrades. This could push Apple’s earnings per share to around $9, potentially valuing the stock at $290, based on historical price-to-earnings ratios.
However, he advised caution on immediate investment at the current stock price of $248, suggesting that investors might wait for a potential dip. Despite this, the long-term outlook presented by Sacconaghi remains bullish, underpinned by Apple’s strategic advancements in AI and its robust management navigating complex geopolitical landscapes.
Disclaimer: The information provided is for informational purposes only and does not constitute financial, investment, or trading advice. Trading stocks/crypto involves significant risk, and past performance is not indicative of future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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