Apple Inc’s partnership with Alibaba should leave it able to plug the “missing piece” in its artificial intelligence strategy from the June quarter, according to analysts.
Following news last month Alibaba would partner with Apple on its AI rollout in China, Wedbush said the deal was “key to the long-awaited growth catalyst” in the region.
Over 100 million of the roughly 200 million iPhones in China were estimated to be in the window of an upgrade opportunity, Wedbush noted.
“Alibaba in our view is leading the broader AI and cloud narratives in China and, along with more stimulus coming from Beijing, this is the right partner and right timing for Apple.
“The key for Apple will be the hundreds of apps getting launched on the Apple ecosystem built on top of Apple Intelligence as this creates another major revenue stream.”
Wedbush added the “tide [would] start to turn” for Apple over the coming year, after it has grappled with muted sales in China due to heated competition from the likes of Huawei.
“In a nutshell, the bears continue to underestimate the golden installed base of 1.5 billion iPhones and roughly 2.4 billion iOS devices.
“China has been a major headwind for Apple over the last year but we believe starting in the June quarter, growth returns to this flagship region.”
An ‘outperform’ rating was reiterated, alongside a $325 share price target.
Shares were flat at $241.55 in pre-market trading.