Apple's stock could benefit from expanding AI offerings, leveraging large device base and semiconductor design.
From Nasdaq: 2025-02-12 01:26:10
Semiconductor stocks like Nvidia and Broadcom have soared due to the AI boom, with Nvidia up 170% and Broadcom up 110%. However, concerns arise as demand may cool off with more efficient AI models like China’s DeepSeek. Apple’s stock could benefit as it expands its AI offerings, leveraging its large device base and semiconductor design capabilities.
Apple’s new AI features, part of Apple Intelligence, could drive iPhone upgrade cycles. Although iPhone sales have been tepid, Apple Intelligence’s limited compatibility with older models creates an incentive for users to upgrade. As AI capabilities expand to more devices, Apple’s iPhone and iPad businesses could see a boost in growth.
Apple’s services business hit $100 billion in revenue, growing by 14% in Q1 FY 2025. New AI-powered tools could drive further growth by offering premium features and subscriptions, as well as new avenues for monetization through higher storage requirements. Apple’s large customer base could provide new revenue streams through compelling AI tools.
China’s DeepSeek AI model breakthrough may disrupt semiconductor stocks like Nvidia but benefit Apple. DeepSeek’s efficient models reduce training costs significantly, potentially reducing demand for high-end GPUs. Apple could benefit from more efficient AI models running locally, leveraging its dominance in personal computing and efficient M Series processors.
AAPL stock’s 4-year returns have been volatile, with annual fluctuations. Trefis HQ Portfolio, with less volatility, outperformed the S&P 500. With uncertain macroeconomic conditions, AAPL’s future performance remains uncertain. Despite being a major AI beneficiary, AAPL stock trades at a relatively high forward earnings multiple, with mid-single-digit revenue growth expected in the next two years. 1. The stock market hit record highs today, with the S&P 500 reaching 4,500 for the first time. This surge was driven by strong earnings reports from tech giants like Apple and Google, as well as positive economic data indicating a robust recovery.
2. In international news, tensions continue to escalate between Russia and Ukraine as Russian troops mass near the border. The US and NATO have expressed concern over the situation, with President Biden warning of severe consequences if Russia invades Ukrainian territory.
3. Climate change remains a pressing issue as a new report shows that global temperatures have risen by 1.2 degrees Celsius since pre-industrial times. Scientists warn that urgent action is needed to limit temperature increases to avoid catastrophic impacts on the planet’s ecosystems and human populations.
4. COVID-19 cases are on the rise in several states across the US, driven by the highly contagious Delta variant. Health officials are urging unvaccinated individuals to get vaccinated and continue following safety protocols to prevent further outbreaks and strain on healthcare systems.
Read more at Nasdaq: Is Apple Stock The Safest AI Play In The DeepSeek Era?