Apple (AAPL) CEO Tim Cook redefined the meaning of AI during the company's Worldwide Developers Conference (WWDC) keynote, where the company unveiled its latest “Apple Intelligence” features and capabilities. Apple's shares soared to an all-time high on Tuesday.
Dan Morgan, senior portfolio manager at Synovus Trust, explains to Yahoo Finance why Apple's late foray into artificial intelligence is a good thing:
“Instead of Nvidia (NVDA) hitting a home run with its Blackwell chips or Microsoft (MSFT) acquiring ChatGPT, they [Apple] “They're going to do it piecemeal with their current product mix and they've outlined that roadmap in the meeting,” Morgan said. “So I think that's a good thing. It gives a new framework for thinking around Apple stock when it comes to Apple's AI initiatives.”
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This post Luke Carberry Morgan
Video Transcript
Dan, I want to change the subject here.
I'm pretty stuck on the AI theme, Dan.
Um, but what's interesting is, Tim Cook got on stage yesterday and he laid out his vision for AI, his AI strategy, and Dan, the investor, was super excited about it today.
Its stock soared.
Dan, what did you think?
Were you equally excited?
Well, Josh, that's interesting because, you know, everyone has been very negative about Apple in terms of their AI strategy compared to other big tech companies.
As we talked about before on the show, everyone was putting out this amazing meta-alphabet of future roadmaps, and Apple was kind of getting left behind.
So we're waiting for Tim Cook and co. to show up at this developers conference and make an announcement.
Josh and Julie, there really hasn't been any big changes. It's not a blockbuster like NVIDIA adopting Blackwell chips or Microsoft acquiring Chad G BT, it's just going to be incremental with our current product mix, and we outlined that roadmap in the meeting.
So, um, I think this is a positive thing, it creates new thinking around Apple stock in terms of AI initiatives and it doesn't repeat the same old story that Apple is being left behind.
Everyone is outselling them in AI, but they definitely have a strategy and they made it clear, and I think it was a positive that the stock closed at a record high today.
Dang, because people took another look at it.
Should you buy more Apple shares now?
As you know, Julie, we have a large position in Apple.
Well, we started buying it in 2005 at a cost basis of about $23 a share, split-adjusted time.
Yeah, I mean, we, actually, I put it on my shopping list because I'm from the Bay Area, I was in California and I saw that their MP3 players were really selling at the time.
This one is for iPhone and it made it onto the list.
So, you know, this is a stock that almost everybody owns, and it's performing so well that everybody is funneling a lot of money into it.
So, you know, we're looking at investors who have the right risk tolerance and the right goals.
Josh and Julie, there's no question that the stock is very expensive right now on a multiple basis.
If you look at the growth that we expect going forward, it's a single-digit deal, a pretty high multiple.
Um, but, you know, it's been on our list for quite a while.
It's been a very successful stock for us, just a big winner.
So it’s hard to turn your back on that.
So this is definitely one that's on our list and one that we'll continue to consider buying for the right investor with the right objectives and risk tolerance.
My final question is about Appledom, and as we know you were a shareholder there for many years.
Have you considered what Tim Cook announced yesterday?
I think the big question for investors is whether that will jumpstart a meaningful upgrade cycle for the iPhone.
Dan, any thoughts on that? Josh, that's a great question. As you know, the iPhone 16 is coming out in September.
It comes with the new iOS 18 operating system with AI features.
There's also AI features, new improvements to Siri, and a Gemini connection with Alphabet.
So, is that enough to put together some kind of super cycle upgrade hit that hasn't really seen the right man in the past few new releases?
So I think if you have enough AI capabilities built in, you can make a strong case.
People will want to go get the new iPhone 16 and just wait and pose, just like they did with the iPhone 14 and iPhone 15 in the past.
