THE “Magnificent Seven” have been the driving force behind the current bull market. If there’s one trend that has driven up the stock prices of big tech companies, it’s artificial intelligence (AI).
Virtually all members of the Magnificent Seven have a deep connection to today’s drive to advance AI:
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Nvidia is the leading designer of GPU chips, delivering growing data centers designed to train large language models.
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Microsoft, AmazonAnd Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) are leading public cloud providers, providing developers with access to foundational models for building new AI-driven applications. All three have also invested heavily in their own language models and chip designs.
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Metaplatforms develops a large, leading language model, LLaMA, spending billions in data centers to train and implement its AI in its applications.
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You’re here is moving toward a robotaxi service powered by its massive investments in AI.
Only one member in seven was exceptionally quiet about their AI: Apple (NASDAQ:AAPL). The iPhone maker usually doesn’t like to talk about what it’s working on until it’s ready for release. But that could change this summer.
Several analysts estimate Apple will make several important AI-related announcements This year. And one analyst expects AI-related products and services to push its stock price to $225, about 33% higher than the price at the time of this writing.
Apple’s Summer of AI
Bank of America Analyst Wamsi Mohan sees the recent pullback in Apple shares as a great buying opportunity ahead of the company’s usual schedule of events, scheduled for this summer.
It sees Apple making a series of AI-related announcements at its annual Worldwide Developers Conference in June. At the company’s annual shareholder meeting, CEO Tim Cook promised investors that Apple would “innovate” this year in generative AI. The stage is therefore set for Cook to unveil great products and services.
Nobody knows what Apple might announce. Although management said it was spending a lot of time and money on generative AI, it didn’t provide many details.
Several reports surfaced last month that Apple was in talks with Google to bring its Gemini AI to iPhones and other devices. Such a deal could be a big win for Alphabet, as its AI efforts have been overshadowed by those of its competitors.
But installing someone else’s AI chatbot on the iPhone isn’t really “innovation.” Investors should expect more.
That may have to wait until late summer, when Apple announces new iPhones. Mohan expects the 2024 iPhone model (presumably the iPhone 16) to offer generative AI capabilities on the device.
This could be a major breakthrough for AI and data privacy, a major goal for Apple. Being able to run AI applications on a smartphone without sending data to a server for processing could open the door to many other AI-based applications and an AI App Store.
Apple is in a unique position to offer these features on its…
