Apple stock soars after AI reveal

Summary

Apple shares surged 6% to a new all-time high following a delayed market reaction to AI announcements, with bullish commentary suggesting these features will boost hardware sales. Analysts from Goldman Sachs and Morgan Stanley predict increased demand and faster iPhone upgrades due to the new AI capabilities. However, concerns arise over privacy and potential data leakage to OpenAI, with Elon Musk expressing skepticism. The debate highlights the need for trust in Apple's privacy assurances as cybersecurity researchers await the opportunity to scrutinize the technology.

Takeaways

• 📈 Apple shares rose 6% today, hitting a new all-time high after the AI announcements.
• 🕒 The positive reaction came a day after the announcements, contrasting with a 2% drop yesterday.
• 📊 Bullish commentary from Wall Street is driving optimism about Apple's AI features boosting hardware sales.
• 📱 The new AI features require last year's iPhone 15 Pro or the upcoming model, creating an upgrade incentive.
• 🚀 Goldman analysts predict a 23% upside in Apple's stock price over the next 12 months.
• 📈 Morgan Stanley believes the hardware requirements will accelerate iPhone upgrades.
• 🔍 Elon Musk expressed concerns about Apple's AI potentially leaking trade secrets to OpenAI.
• 🤖 The ChatGPT integration with Siri is optional and requires user permission to use OpenAI's technology.
• 🔒 Apple insists that most of the AI functionality runs on its proprietary technology, maintaining user privacy.
• 📱 Using ChatGPT via Siri is similar to using the ChatGPT app on an iPhone, but integrated into iOS.

Q & A

Why did Apple's shares initially fall after the AI announcement and then rise by 6% the next day?

Apple's shares fell 2% immediately after the AI reveal, possibly due to initial skepticism or underwhelming first impressions. However, they rose by 6% the next day following a wave of bullish commentary from Wall Street analysts who believed the new AI features would drive hardware sales, particularly for the iPhone 15 Pro or the upcoming model.

What is the 'AI iPhone FOMO effect' mentioned in the transcript?

The 'AI iPhone FOMO effect' refers to the potential fear of missing out on the new AI features that Apple announced, which might prompt users to upgrade to the latest iPhone models to access these features.

What did Goldman analysts say about Apple's AI features and their impact on product demand?

Goldman analysts stated that the AI features should help to drive demand for Apple's products and they also raised their price target for Apple, implying a 23% upside over the next 12 months.

How did Morgan Stanley respond to the AI features announced by Apple?

Morgan Stanley echoed Goldman's sentiments, noting in their morning note that the hardware requirements of the new AI features will speed up iPhone upgrades.

What is the current status of iPhone owners' access to Apple's AI technology?

Most iPhone owners in the install base of more than 1 million devices currently do not have access to Apple's AI. The market will have to wait to see if they choose to upgrade their devices earlier than planned just for the AI features.

What is Elon Musk's concern regarding the new iPhone and its potential to leak trade secrets to Open AI?

Elon Musk expressed a strong reaction, suggesting that he might not allow the new iPhone into his offices if he believes it could leak trade secrets to Open AI. However, the transcript indicates that Musk may not fully understand the technology or its implementation.

How does the optional ChatGPT feature work with Apple's AI technology?

The ChatGPT feature is optional and may prompt users to try it when they ask Siri a question. However, it's not automatically used and most of the AI features announced by Apple run on their proprietary technology, not Open AI's.

What is the reporter's opinion on Elon Musk's tweets regarding Apple's AI technology?

The reporter suggests that Elon Musk's tweets were incorrect about how the product works and that his comments may come off as 'sour grapes,' possibly due to his ongoing disputes with Open AI.

What assurance does Apple provide regarding the privacy and data security of its AI technology?

Apple emphasizes that the ChatGPT feature is optional and that data is not sent to Open AI without user permission. The company maintains a strong stance on privacy and data security.

How do cybersecurity researchers view the new AI features announced by Apple?

Cybersecurity researchers are eager to get their hands on the new AI features to examine them closely and verify the claims made by Apple regarding privacy and data security.

What is the comparison made between using Apple's AI features and using Google for unanswered queries on Siri?

The comparison highlights that if Siri cannot answer a question, it may default to a traditional web search, similar to how using Google for the same query would result in data being shared with Google.