Apple Inc's (NASDAQ:AAPL, ETR:APC) upcoming Worldwide Developers Conference (WWDC) is set to be the company's most pivotal event in over a decade, according to a recent analysis by Wedbush Securities.
Scheduled for June 10, the set-piece in Cupertino, California, will unveil the iPhone maker's comprehensive strategy for integrating artificial intelligence (AI) into its product ecosystem, marking the beginning of an AI-driven growth phase for the tech giant.
Major announcements expected
West Coast investment Wedbush bank expects Apple will introduce a generative AI stack designed for both developers and consumers, positioning this as a transformative moment for the company.
This integration is expected to enhance both Apple's hardware, particularly the iPhone, and its range of services.
Daniel Ives, a senior analyst at Wedbush, emphasised that the introduction of AI technologies could add substantial value to Apple's stock, predicting an increase of $30 to $40 per share as the AI initiatives unfold.
AI integration and developer engagement
At the heart of this AI revolution is the expected announcement of a partnership with OpenAI, which will likely feature an exclusive chatbot with enhanced capabilities.
Wedbush reckons his development will leverage both on-device and cloud-based large language models (LLMs) powered by Apple's high-end chips.
Furthermore, the introduction of an AI App Store is anticipated, providing a platform for developers to create and monetise applications built on Apple's new AI framework, the bank added.
This move is seen as a catalyst for long-term services growth, tapping into Apple's extensive user base of 2.2 billion iOS devices worldwide, the investment bank said.
Impact on future products
Apple is also expected to preview the iPhone 16, which will incorporate exclusive AI features designed to stimulate a significant upgrade cycle.
This aligns with the broader launch of iOS 18, which will introduce additional AI functionalities.
Apple’s emphasis on AI is set to enhance the performance and appeal of its devices, fostering a renaissance in iPhone sales and driving sustained growth, the investment bank said in a preview note.
Analyst perspectives and market expectations
Wedbush maintains an "outperform" rating for Apple, with a 12-month price target of $275, reflecting a strong belief in the company's growth potential fueled by AI.
Its analysts argue that the current market estimates for iPhone sales in 2024 are achievable, with conservative projections for 2025. They foresee pent-up demand potentially leading to the sale of over 270 million iPhones, spurred by the new AI capabilities.
The firm also highlights the robustness of Apple's services segment, which continues to exhibit double-digit growth and plays a crucial role in the company's overall valuation.
The upcoming AI announcement is seen as a pivotal factor that the market has yet to fully appreciate, presenting significant monetisation opportunities that could further bolster Apple's financial performance.