We recently published a list of 10 Buzzing AI Stocks This Week. In this article, we are going to take a look at where Apple Inc (NASDAQ:AAPL) stands against other buzzing AI stocks this Week.
Paul Hickey, Bespoke Investment Group co-founder, said while talking to CNBC in a latest program that despite the market gains still concentrated in a few names, he’s bullish short and long term because of AI.
“The longer term play is the AI trade. This is an AI bull market. Every bull market has a theme, and ChatGPT was to AI what Netscape and AOL were to the internet.”
Hickey also mentioned the possible scenario where market gains would start to broaden out.
“ChatGPT didn’t invent AI; it made it tangible for consumers and businesses, just like Netscape with the internet. It caused, you know, made it a lot more practical on the part of businesses and the consumer. So I think in that respect, there’s a lot more investment to go, and we’ve seen the infrastructure stocks in AI benefit. But even just last week, some of these software names—and we’re going to slowly start to see that broaden out to the rest of the economy.”
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For this article, we picked 10 AI stocks currently buzzing on the back of latest news and analyst ratings. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 158
Barton Crockett from Rosenblatt explained on CNBC why he believes Apple Inc (NASDA:AAPL) could be a long-term play but not a stock to own just for this holiday season:
“We do believe that Apple is not really a holiday play. We do think that the iPhone growth will be accelerated as they roll out more broadly and more impactfully with their AI features, but that’s a next year story. This year, it’s gratifying that their demand has been as stable as it has, given the changes and their slow start in AI. But we can look forward to better days ahead. We do believe that the stock has anticipated that, and we think that makes Apple a stock you want to own here—not for holiday sales, really, but for next year.”
Morgan Stanley recently called Apple’s current position “challenging,” with KeyBanc and TF International Securities expressing concerns over iPhone sales volume. KeyBanc downgraded Apple to “underweight” with a $200 price target. Almost every bullish case on Apple Inc (NASDAQ:AAPL) was built around this assumption: millions of people would rush to upgrade their iPhone because of AI features. But the latest numbers for iPhone 16 do not show much enthusiasm for the new device.
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.”
Overall, AAPL ranks 6th on our list of buzzing AI stocks this Week. While we acknowledge the potential of AAPL, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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