Apple Stock Missed Out on the AI Rally
Apple, despite a 49% gain in stock value last year, was the weakest performer among the Magnificent 7 stocks. The lackluster iPhone sales contributed to this underperformance, coupled with insufficient recognition for its AI endeavors when compared to its tech counterparts.
During the fiscal Q1 2024 earnings call, Apple CEO Tim Cook hinted at significant efforts into AI, mentioning ongoing work on generative AI. However, Apple’s ventures in this domain are yet to be fully unveiled, with promises of exciting developments later in the year.
Apple Could See an iPhone Supercycle
Anticipating potential product reveals at the Worldwide Developers Conference in June, the rise of generative AI could trigger a significant upsurge in hardware sales, offering a silver lining after a period of sluggish iPhone performance. Analysts such as Samik Chatterjee from JP Morgan foresee an iPhone upgrade wave catalyzed by AI advancements, presenting an opportune moment for investment given Apple’s current valuation.
Tesla Is Also an AI Play
Beyond its electric vehicle identity, Tesla boasts a formidable AI aspect, notably in autonomous driving and the concept of robotaxis which underpin a substantial portion of its market value. Despite ambitious initiatives, challenges persist, evident in delays in achieving fully autonomous driving capabilities and unmet deadlines for major product launches.
Tesla Is Building Next-Gen AI Products
Tesla’s foray into advanced AI through projects like Optimus humanoids illustrates the company’s ambition to become a powerhouse in artificial intelligence and robotics. Elon Musk, Tesla’s visionary leader, envisions a future where AI stands as the cornerstone of the company’s innovation, although recent governance struggles may hinder his aspirations. Tesla’s current market challenges hint at a potential turnaround, especially as its AI-centric strategies gain traction in the coming years.
