Apple's Upcoming AI Revolution: Insights from Analyst Dan Ives

Apple Inc. (AAPL) is poised for a transformative phase with the anticipated launch of its new artificial intelligence system, which has been described as the beginning of a "consumer AI Revolution." This prediction comes from Dan Ives, an analyst at Wedbush Securities, who shared his optimistic outlook on social media platform X.

What to Expect?: Ives expects that the introduction of Apple Intelligence 18.1, set to roll out imminently, will signify a pivotal moment for the company. He also noted that the 18.2 version is projected for release in December. According to Ives, this launch marks the start of a significant upward shift in Apple's trajectory, especially with the incoming iPhone 16.

In his statement, he remarked, “This is the beginning of the consumer AI Revolution going through Cupertino and will kick off a true supercycle for Apple starting with iPhone 16. We expect a strong iPhone performance for the September quarter and the December guidance.”

Ives pointed out that those who have doubted Apple’s potential, particularly long-term skeptics, have underestimated three crucial factors that have contributed to the company's remarkable growth, notably its $1 trillion market capitalization increase. He articulated these as: 1. The installed base of devices and the associated demand for iPhone upgrades; 2. The expansion and valuation of Apple’s services segment; and 3. The rising significance of AI in consumer technology.

“We believe bears and long-time Apple naysayers who have overlooked the last $1 trillion+ upward move in market cap for Apple have miscalculated three important dynamics,” Ives stated.

Industry Context: This prediction arrives amid evolving events that impact Apple’s AI narrative. Recently, a Rosenblatt analyst expressed concerns regarding potential declines in smartphone upgrade rates, casting doubt on the AI-driven super cycle. However, Ives provides a contrasting perspective that aligns with high expectations for the new Apple Intelligence system. This system leverages advanced prompt engineering techniques to enhance accuracy and mitigate hallucination risks in its AI functionalities.

Furthermore, a Goldman Sachs analyst anticipates that Apple will report stronger-than-expected results in the fourth quarter, especially as the October 31 release date approaches.

Stock Performance: On the last trading day, Apple Inc. closed at $231.41, marking a gain of 0.36%. However, in after-hours trading, the stock saw a slight decrease of 0.24%. Notably, Apple’s stock has experienced significant growth this year, rising 24.66%, according to data from financial markets.

Apple, AI, stocks