“Call me an AI powerhouse now.”
Given its recent stock price weakness due to sluggish iPhone sales, it would likely be what Apple wants to say. Until now, Apple had hesitated to enter the artificial intelligence (AI) market due to its unique perfectionism and secrecy.
As a result, it was excluded from the Nvidia-led AI rally. Despite being the first U.S. company to surpass a market capitalization of $3 trillion, Microsoft and Nvidia successively overtook it.
However, on June 11, Apple’s stock price surged 7.26% on the New York Stock Exchange to record a historic high of $207.15.
Consequently, its market capitalization also increased to $3.18 trillion. The market cap difference with Microsoft, the number one company in market capitalization, is now only $39 billion.
In contrast, Nvidia fell 0.71% due to profits from its previous surge.
Replacing Nvidia, Apple led Wall Street’s AI rally. As Apple’s stock surged, the Nasdaq and S&P 500 hit record highs, causing a rally in the U.S. stock market.
Instead of Nvidia, Apple was the AI leader for the day.
The surge in Apple stock was due to the unveiling of its in-house AI platform, Apple Intelligence on June 10. Apple unveiled Apple Intelligence at the Worldwide Developers Conference 2024 (WWDC2024).
The core of Apple’s AI is the upgrade of Siri, the voice assistant. Apple described this year as a new era for Siri as AI has enabled more work effectiveness in the calendar, camera, mail, and alarm apps.
Apple also partnered with OpenAI, which developed ChatGPT, to improve AI functionality. Apple added that it is in ongoing discussions with Google to utilize Google’s generative AI, GeminAI.
Bloomberg rated the new Siri as “more natural and contextually relevant,” adding that “it can better understand the user’s speech, even when the user misspoke.”
These positive factors led to a more than 7% surge in Apple’s stock price today. It seems that Apple is now fully riding the AI boom.
Gil Luria, an executive director at investment firm D.A. Davidson, evaluated, “What Apple has introduced is an unprecedented feature, and it has given us confidence that AI will be integrated into everyday life.”
Luria upgraded his investment opinion on Apple from neutral to buy, raising his target price from $200 to $230.
Experts agree that although Apple has been unable to avoid a relatively weak stock price due to sluggish iPhone sales recently, it seems to have found a rebound momentum with its AI strategy.