Apple’s (AAPL) stock surged by 7% today, reaching new 52-week highs after unveiling a groundbreaking collaboration with OpenAI to incorporate ChatGPT into its flagship products and services.
Considering this remarkable development, investors are now pondering whether it’s the right time to capitalize on Apple’s stock as its operating system undergoes an innovative transformation.
Apple’s Artificial Intelligence Leap
Joining the ranks of tech giants swiftly embracing and leveraging artificial intelligence, Apple stands alongside Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT) in harnessing the power of generative AI chatbots.
Apple is upgrading Siri, its beloved virtual assistant, with AI chatbot functionalities under Apple Intelligence, the company’s AI framework set to integrate into iOS 18—Apple’s upcoming operating system fueling its iconic devices like the iPhone, iPad, MacBook, and smartwatch.
Recent Stock Performance & Analysis
Having soared above $200 a share recently, Apple’s stock now boasts a positive year-to-date performance with 7% gains. While this somewhat surpasses the S&P 500, Apple’s stock has lagged behind Alphabet, Meta Platforms, and Microsoft, with the Nasdaq leading the pack with a 15% surge this year.
Image Source: Zacks Investment Research
Currently, Apple’s forward earnings multiple stands at 29.3X, slightly higher than Meta Platforms and Alphabet’s P/E ratios but below Microsoft’s 36.3X, as well as the benchmark average of 21.7X.
Image Source: Zacks Investment Research
Evaluating Growth Trajectory
Based on Zacks estimates, Apple’s total sales are projected to remain relatively flat in fiscal 2024 but are anticipated to rise by 5% in FY25, reaching $405.81 billion. Notably, Apple’s sales outlook outperforms its tech peers, especially Alphabet, whose sales are forecasted to exceed $300 billion next year.
On the earnings front, Apple’s annual profits are expected to climb by 7% this year and are set to increase by another 9% in FY25, hitting $7.21 per share.
Image Source: Zacks Investment Research
Key Takeaways
While it’s early to determine if Apple is embarking on a new growth trajectory with its foray into artificial intelligence, AAPL currently carries a Zacks Rank #3 (Hold). Investors might find better entry points post the current rally surrounding the Apple Intelligence announcement and the OpenAI collaboration.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to consider opportunities that offer positive growth potential, much like the trajectory Apple is currently navigating amidst its innovative advancements.
1. Medical manufacturer that has shown a remarkable +11,000% growth over the past 15 years.
2. Rental company that is dominating its sector with unprecedented success.
3. Energy powerhouse aiming to increase its already substantial dividend by 25%.
4. Aerospace and defense standout that recently secured a potential $80 billion contract.
5. Giant Chipmaker expanding its operations with massive plants in the U.S.