Wedbush: Apple will lead consumer AI amidst iPhone 16 super cycle

AppleInsider

The new Apple Intelligence is so powerful, analysts at Wedbush are claiming that Apple has put itself at the forefront of artificial intelligence with it, and it will launch an iPhone 16 upgrader super cycle.

iPhone 16 Pro is expected to benefit from an upgrade super cycle

Wedbush has previously claimed that the introduction of AI features would so increase demand for the iPhone 16 family that it would outweigh concerns over China sales. Now in a note to investors seen by AppleInsider, Wedbush says it is bullish both on the iPhone and on Apple Intelligence.

Specifically, it argues that investors are beginning to regard Apple as the gatekeeper of the consumer AI revolution. Instead of being behind the AI industry as often reported, Apple will lead the way to an extent that it's Meta and Google that need to catch up.

Wedbush argues that this is because of how Apple Intelligence has been built to work with AI apps from other developers, such as OpenAI. The prediction is that hundreds of generative AI apps will be developed to work with Apple Intelligence in the next year.

Regarding upgrade figures, Wedbush estimates that 270 million iPhone users have not upgraded in over four years. While it does not give figures in this new note, Wedbush has previously predicted that 270 million would also be the number of iPhones that will be sold in 2024.

Wedbush bases this in part on its Asia supply chain checks, which it says shows signs of stabilization. It believes that June will prove to be the last negative growth quarter for China, and that there will be a significant turnaround with the iPhone 16 launch.

The firm's analysts predict an incremental services high margin growth for Apple of $10 billion per year. It expects that the combination of sales opportunities with both the iPhone and AI software will add $30 to $40 per share.

Wedbush is maintaining its $275 price target. That follows JP Morgan raising its Apple stock target to $245, again specifically on the Apple Intelligence announcements.



Read on AppleInsider

ssfe11

Wow another annual 10b App Store growth with its 75% margin is amazing. Plus hardware sales through the roof looking like second half 2024 the beginnings of the best ever for Apple. 

coolfactor

Wedbush argues that this is because of how Apple Intelligence has been built to work with AI apps from other developers, such as OpenAI. The prediction is that hundreds of generative AI apps will be developed to work with Apple Intelligence in the next year.

I don't think Wedbush knows what he is talking about. Apple Intelligence won't "just work" with hundreds of 3rd-party services as sources of knowledge. That's backwards. There will be plenty of AI integration "on Apple devices" through apps, but they will be consumers of the tech, not service providers. Apple is carefully vetting which external services will serve as knowledge bases for Siri. OpenAI is first, and we're hearing rumours of additional services being explored. But not "hundreds". There's only a handful of worthy services and this won't change anytime soon.

Wedbush is correct that Apple is in a very unique position to catapult to the forefront of the AI wave, but only because they will leverage the work being done by others. It's genius.

jellybelly

coolfactor said:

Wedbush argues that this is because of how Apple Intelligence has been built to work with AI apps from other developers, such as OpenAI. The prediction is that hundreds of generative AI apps will be developed to work with Apple Intelligence in the next year.

I don't think Wedbush knows what he is talking about. Apple Intelligence won't "just work" with hundreds of 3rd-party services as sources of knowledge. That's backwards. There will be plenty of AI integration "on Apple devices" through apps, but they will be consumers of the tech, not service providers. Apple is carefully vetting which external services will serve as knowledge bases for Siri. OpenAI is first, and we're hearing rumours of additional services being explored. But not "hundreds". There's only a handful of worthy services and this won't change anytime soon.

Wedbush is correct that Apple is in a very unique position to catapult to the forefront of the AI wave, but only because they will leverage the work being done by others. It's genius.

Wedbush has a great track record with AAPL over the last 12 years. 

MantlesD

In Europe we won't have much reason to upgrade as long as all the new features will not be available to us.

ihatescreennames

MantlesD said:

In Europe we won't have much reason to upgrade as long as all the new features will not be available to us.

Many new features will be available to you in iOS 18. AFAIK the only 3 Apple has mentioned won’t be available in EU countries are iPhone Mirroring, SharePlay Screen Sharing and Apple Intelligence. 

nubus

ihatescreennames said:

MantlesD said:

In Europe we won't have much reason to upgrade as long as all the new features will not be available to us.

AFAIK the only 3 Apple has mentioned won’t be available in EU countries are iPhone Mirroring, SharePlay Screen Sharing and Apple Intelligence. 

The only feature in iOS 18 in need of new hardware and could spark a super cycle is AI. That will only ship in US and only in English. All other features run on existing hw.

sconosciuto

Bought several thousand shares @ 35.5¢ each. Crazy overweighted in my portfolio but every time I srsly consider selling some off to take some of my wins and use it to rebalance… it seems as if it would make more sense to hang on for the next rally. So far standing pat has paid off handsomely and then some. 

blastdoor

MantlesD said:

In Europe we won't have much reason to upgrade as long as all the new features will not be available to us.

The EU seems intent on protecting Europeans from being subjected to American innovation. So I guess if Europeans want innovation, they’ll have to figure out how to do it themselves.