Apple (NASDAQ:AAPL) the stock really struggled to reach a new all-time high. Undoubtedly, Apple appears to have been overshadowed by its Magnificent Seven peers, but there are catalysts that could help fuel a highly anticipated rally, perhaps to the all-time high price target of $250 per share .
Indeed, Apple shares seem to be a real battleground between the bulls and the bears, especially lately. Pessimists would point to weak growth and stagnation in iPhone demand in the Chinese market. Meanwhile, the bulls have a strong argument that the high-margin services segment continues to grow and that impending products could easily lead to much higher growth rates.
Personally, I side with the bull camp. While the bearish arguments are entirely valid, I think they are too retrospective. Of course, the iPhone 15 Pro Max could have seen much better sales if the Chinese economy hadn't experienced a massive crisis. And the recent drama surrounding the removal of Apple Watches from shelves has dealt a subtle blow to the wearable segment.
Apple Vision Pro will be a bigger deal in the future
However the last quarter wasn't bad, it certainly left a lot to be desired. Still, with the Vision Pro selling quite well, expect the new spatial computing device to become a bigger part of the Apple market. income pie every year.
Although the Vision Pro probably won't outsell iPhones in the next three to five years, I think it could provide good value for money in the Mac segment. This is especially true if Apple's innovators can reduce the size and power requirements of the device (a smaller form factor without a detached battery would certainly help the device become more than just a “niche product”) .
Although it will take time for Vision Pro sales to increase, I think progress on the software side could act as a driver for the stock price in the short to medium term. We're probably more than a year away from the next iteration of Apple's space computer. However, by then, 2024 could see significant software improvements (especially in AI).
Whether it's more sophisticated updates to visionOS (Vision Pro's operating system) or an increasing number of apps (maybe some of them will be so-called “killer apps”) »?), the excitement around the product has the potential to grow at an exponential rate from here.
In the meantime, I think Vision Pro's App Store library (there were 600 apps on the first day of release) seems pretty robust. As more developers get their hands on visionOS tools, I would expect the number of apps and games to increase by the end of the year. This alone could make Vision Pro a major driver of the stock, as investors anticipate greater sales in the future in response to the rapidly evolving software ecosystem.
WWDC 2024 could be the highly anticipated reveal of AI
Following Apple's latest earnings release, CEO Tim Cook teased analysts, hinting that generative AI products would arrive later this year. It's no mystery that Apple has invested “a tremendous amount of time and effort” (according to Tim Cook) into integrating AI. And while it would have been nice to have more details from Cook, like a date and specific features, I think the AI premium that many Magnificent Seven titles command now will be commanded by Apple once that its new innovations in AI will finally be revealed.
Bloomberg's Mark Gurman thinks iOS 18 (the iPhone's next operating system update that could be a highlight of this year's WWDC) could represent the 'biggest' update in its history , partly thanks to AI. We can only speculate at this point, but I think he's right. More details from the update could very well help push the stock above $200, perhaps toward the $250 target currently held by Wedbush analyst Daniel Ives.
Ives calls the Vision Pro Apple's “first major breakthrough” in AI. If he's right, other Wall Street analysts could find themselves racing to raise their targets to prices closer to (or perhaps higher than) Ives'.
Without a doubt, ChatGPT-like Siri updates and a potential AI App Store could propel Apple stock from an AI underdog to a top contender, perhaps even a leader. This is especially likely given that a large majority of Apple's “gold” installed base will actively use these technologies if they are featured in iOS 18.
Is AAPL Stock a Buy, According to Analysts?
On TipRanks, AAPL stock is a Moderate Buy. Out of 26 analyst ratings, there are 17 buy recommendations, eight hold, and one sell recommendation. THE average price target for AAPL stock is $208.07, implying 10.5% upside potential. Analyst price targets range from a low of $158.00 per share to a high of $250.00 per share.
It's easy to be less bullish on Apple stock as the iPhone maker's sales and stock growth stall. That said, if you look at Apple's near future, it's clear that selling AAPL stock here could turn out to be a mistake, especially if Ives' predictions come true.
For now, I view the WWDC 2024 and Vision Pro news as potential catalysts to help push shares higher over the course of the year. Could 2024 be the year of AI for Apple? I think it might be.