10 AI Stocks Wall Street is Talking About

4. Apple Inc (NASDAQ:AAPL)

Number of Hedge Fund Investors: 158

Dan Niles of Niles Investment Management said while talking to Schwab Network in a latest program that the data around Apple Inc’s (NASDAQ:AAPL) new iPhone has been “disappointing.”

“Relative to three months ago, the data, if you actually take a look at it, has been somewhat disappointing, with the rollout being much slower. In other words, you’re going to get another update to Apple Intelligence, which is their AI features, in December. You don’t get a rollout in Europe until next year, hopefully in the first quarter, and for China, we still don’t know when they’re going to roll out AI features. With the stock now trading at a multiple that just keeps expanding—now in the low 30 PE range compared to the S&P at about 22 times—it’s looking pretty expensive. So for me, Apple Inc (NASDAQ:AAPL) is not one I would really be that bullish on right here. It’s just going up with the tape, but I think as we get closer to them having to report and guide, you may have an issue.”

Apple Inc (NASDAQ:AAPL) has been seeing a long-term decline in mobile carrier upgrade rates, especially postpaid, for several years. This suggests that people are holding onto their devices longer, likely due to economic factors, satisfaction with current technology, or a lack of exciting new features in recent models

In the latest earnings call, Apple Inc (NASDAQ:AAPL) CEO Tim Cook highlighted new features for the iPhone, such as a more comfortable watch band and sleep apnea detection, but none appeared to be major demand drivers for new customers.

Mar Vista Strategic Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:

“Apple Inc. (NASDAQ:AAPL) stock was strong in the quarter as investors viewed the company’s generative AI roadmap and iPhone 16 product cycle positively. The market was reminded of the strength of the Apple ecosystem as management demonstrated how generative AI solutions would be integrated into its iOS 18 operating system, which was broadly released in the iPhone 16 late in calendar Q3. We believe Apple’s generative AI-enabled products should spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high single digits and low double-digits over our investment horizon.”