AI Sends Apple’s Share Price Soaring

Two days after Apple unveiled its wave of artificial intelligence systems, the tech giant witnessed a massive share price rally.

Photo of Apple Park in Cupertino, California
Photo by Carles Rabada via Unsplash

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As with MP3 players, smartphones, and tablets, Apple is arriving a little late to the AI party. But as always, it knows how to make an entrance when it does show up. At least Wall Street seems to think so.

On Wednesday, two days after Apple unveiled its wave of artificial intelligence systems across its myriad platforms, the tech giant witnessed a massive share price rally — one big enough to surpass Microsoft and become the most valuable company in the US.

Artificial Flavoring

Despite launching its first major product in years, the Apple Vision Pro headset, Apple started the year in a noted slump, with many on Wall Street fearing the Cupertino company was at risk of falling behind in the AI race. In fact, along with Tesla, Apple’s share price skid threatened to break up the so-called “Magnificent Seven” trading bloc of mega-cap firms. Chipmaker Nvidia even briefly surpassed Apple by market cap last week.

The unveiling of AI integration across its operating systems, devices, and services at Monday’s annual Worldwide Developers Conference (WWDC) — which includes a partnership with OpenAI to bring ChatGPT to iPhones — marked a major turning point in investor sentiment. Though, not quite at first:

  • Apple’s share price fell nearly 2% Monday, as investors digested the event’s news, and another nearly 1% in premarket trading early Tuesday morning. Some onlookers, including Elon Musk, balked at the chance of security lapses that the ChatGPT partnership may bring.
  • But sentiment has taken a complete U-turn. Across Tuesday and Wednesday, Apple shares rallied more than 10%. That’s enough for a roughly 30% rise from its April low, and big enough to briefly push its market cap to a seismic $3.3 trillion.

Big Mac: The case for investors is pretty simple, as outlined in a recent note by Bank of America analyst Wamsi Mohan. Essentially, iPhone sales had been slumping for a while now, and the new tools promised by Apple Intelligence could spur ”a multiyear upgrade cycle from faster replacement.” Ben Thompson, noted tech analyst and author of the newsletter Stratechery, sees optimism for Apple in the far-flung AI-dominated future, too, writing: “Any analysis of Apple’s prospects in an AI world should start with the assumption that AI is a complement to Apple’s business, not disruptive,” adding “AI makes high-performance hardware more relevant, not less.” In other words, advantage: Apple.