Proactive Investors - Black Friday kicks off a significant holiday season for iPhone Maker Apple Inc (NASDAQ:AAPL, ETR:APC) with the launch of its AI offering Apple Intelligence, analysts at Wedbush believe.
Apple is expected to release its iOS 18.2 software update next week.
“The release of 18.2 will be a significant software update for Apple Intelligence which will bring a suite of AI features including ChatGPT integration,” analysts wrote in a note to clients.
Notably, this update includes Genmoji, front and center ChatGPT integration in Siri, Visual Intelligence, image playground, and other AI features.
“Our view is Apple's AI rollout over the next few months kick-starts a new era for [Apple headquarters] Cupertino as ultimately hundreds of AI-driven apps get built by developers on top of the building blocks of Apple Intelligence,” analysts wrote.
“This will be a multi-year AI journey that will define the future for Apple with its next-generation chip architecture, hardware releases, and future iPhone models built around the AI foundation that many consumers will ultimately embrace.”
Wedbush repeated its ‘Outperform’ rating and $300 price target on Apple, implying upside of about 27.5% from its share price on Friday morning.
They believe many bears and long-time “Apple naysayers” have miscalculated three important dynamics, including the company’s unmatched installed base of more than 2 iOS devices and 1.5 billion iPhones, of which about 300 million present an upgrade opportunity.
Analysts emphasized Apple's $2 trillion Services business, which is driving greater monetization of its customer base.
They also noted that consumer AI will largely operate within Apple's ecosystem, with over 20% of the global population expected to interact with AI on an Apple device in the coming years.
“We believe the success of iPhone 16 with a strong holiday season ahead will be the launching pad for a renaissance of growth in Cupertino over the next 12 to 18 months,” Wedbush's analysts concluded.