Apple Inc. (NASDAQ:AAPL) has been identified as a major player in the artificial intelligence market by renowned investor Steve Eisman of “The Big Short” fame. He believes that Apple’s AI strategy will lead to substantial gains.
What Happened: Eisman, who now serves as a senior portfolio manager at Neuberger Berman, expressed his views on Apple’s AI potential during a recent CNBC “Fast Money” segment.
"I think Apple is actually the hidden AI play," Eisman said.
He highlighted Apple’s AI strategy as a key factor that could drive significant growth for the company, just a day before NVIDIA Corp‘s (NASDAQ:NVDA) fiscal first-quarter results were due.
Eisman, known for his successful bet against the housing market before the 2008 financial crisis, sees Apple as a major beneficiary of the AI boom. He mentioned Nvidia, Advanced Micro Devices (NASDAQ:AMD), and cloud companies with extensive databases as the most obvious AI investment opportunities.
However, he believes that Apple, often overlooked in AI discussions, could be the biggest beneficiary when AI-driven apps become mainstream.
He pointed out that Apple’s entire product line could see a significant refresh once AI-driven apps become available. This could lead to a surge in demand for Apple’s devices, including iPhones, iPads, and laptops.
"When the apps show up the biggest probably beneficiary is going to be Apple because they're going to have a refresh of literally everything that they sell," Eisman said.
Eisman also emphasized the need for patience, as the development of AI-driven apps will take time, but once they are available, a significant refresh cycle is expected.
Why It Matters: Apple’s AI strategy has been a topic of interest in recent discussions. Analysts have highlighted the potential for AI advancements to drive higher institutional ownership of Apple’s iPhone, with a 23.5% upside.
This comes on the heels of Apple’s unveiling of a new AI model that outperformed OpenAI’s GPT-4, despite being lighter and faster.
However, Apple is also facing challenges in the AI space, with competitors such as OpenAI and Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) continuing to make strides.
Apple’s AI strategy is seen as a key factor in its potential “renaissance of growth,” with a potential partnership with OpenAI being highlighted as a crucial event for the company. The upcoming WWDC is expected to be a key moment for Apple, with its AI reveal being touted as the most important event for the company in the last decade.
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