Apple Inc. AAPL CEO Tim Cook’s first mention of AI during the December quarter earnings call has Wedbush’s Dan Ives excited about the iPhone maker’s prospects going forward.
Apple’s Ambitious AI Prospects: Ives believes that despite challenges in markets like China, Apple is well-positioned to accelerate its AI initiatives. He asserts that Apple is embarking on a “new growth cycle,” with AI and iPhone representing its primary growth drivers.
Ives expressed his conviction by stating, “We view Apple like Meta 18 months ago… entering a major growth cycle despite Street giving no credit.”
During the earnings call, Cook also highlighted another significant milestone – Apple now boasts a total installed base of 2.2 billion across iPhones, iPads, Macs, and other devices. This expansive user base provides a robust foundation for Apple to leverage its AI efforts. The company’s AI strategy has remained relatively low-profile compared to other tech giants such as Microsoft, Google, or Meta Platforms Inc.
In addition to Dan Ives, Cook’s mention of AI also piqued the interest of Deepwater Asset Management’s Gene Munster.
On the iPhone front, Apple reported a 6% increase in iPhone 15 sales compared to the previous series, securing a 64% market share in the U.S. However, in China, the company faced a 12% decline in iPhone sales due to heightened competition from Huawei. Despite this setback, Ives anticipates a resurgence in iPhone sales in China in the latter half of the year.
Apple’s AI Breakthrough: Notably, Apple has unveiled a breakthrough in AI through a research paper, outlining its ability to run large-language models on devices with limited memory. This advancement signifies the company’s capability to introduce on-device AI to older iPhones as well. It is a significant development, considering that older iPhones have had relatively limited memory compared to modern Android smartphones.
Stock Performance: Apple’s shares closed at $185.85 on Friday, representing a 0.54% decrease over the last 24 hours. In after-market trading, the shares declined further to $185.11, marking a 0.4% drop, as per Benzinga Pro data.