On Monday, Gene Munster, managing partner at Deepwater Asset Management, expressed his confidence in the potential of Apple Inc.’s (NASDAQ:AAPL) new AI features, unveiled at WWDC 2024, to drive growth beyond current estimates.
What Happened: Munster shared “pressure points” after the event on social media platforms like X, formerly Twitter, and YouTube. He suggested that the new AI features could encourage Apple’s user base to upgrade their hardware more frequently, thereby allowing the tech giant to exceed estimates over the next few years.
He pointed out that the new AI features would require users to have an iPhone 15 Pro or later, or an M1 chip or later for Mac and iPad. This requirement effectively means that 85% of current devices will not be able to run these experiences, raising the question of whether the features will be enough to excite users to upgrade.
See Also: Apple’s Warranty Updates, iPhone Support Duration, And More: This Week In Apple News
Although the features are not new to those following the tech industry closely, Munster believes that their integration within Apple’s devices will offer a more personalized AI experience. This, he suggests, could lead to a better-than-expected upgrade cycle over the next few years.
He also highlighted that Apple’s approach to making technology easy to use will be a key factor in driving user excitement for these new devices. “I think that is going to be a moment for people to get wanting these new devices,” Munster said.
He concluded by stating, “I do believe this is the most significant announcement since the iPhone.” The Deepwater analyst was referring to the iPhone’s introduction of the touch interface in 2007 which made it “special.”
“I think AI has that same power to really fundamentally change the types of things that we do on our phone,” he added.
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Why It Matters: The new AI features, dubbed “Apple Intelligence,” were announced at the WWDC 2024 by Apple. The features are integrated deep within the operating systems for iPhones, iPads, and Macs, and across apps like Messages, Mail, Calendar, and more.
As part of its broader AI strategy, Apple also announced a partnership with Microsoft Corporation-backed OpenAI to integrate ChatGPT into iOS 18, iPadOS 18, and macOS 15 Sequoia.
However, despite these advancements, Apple shares closed lower on the day of the WWDC 2024 announcement. Historically also, Apple's stock has typically underperformed during previous WWDC events. In the past decade, Apple shares have more frequently ended lower rather than higher after these events.
Price Action: Apple shares closed 1.9% lower at $193.12 in Monday’s regular session and declined another 0.4% in the after-hours trading, according to data from Benzinga Pro.
Photo courtesy: Shutterstock
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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