3. Apple Inc. (NASDAQ:AAPL)
Billionaire Israel Englander’s Stake Value: $1,311,099,383
Apple Inc. (NASDAQ:AAPL) has finally entered the AI party with a bang, announcing new AI plans that many believe would create a strong ecosystem around the company’s software and hardware products. As a result, Apple Inc. (NASDAQ:AAPL) shares added over $215 billion in market cap and closed at a record high on June 11. TF International Securities analyst Ming-Chi Kuo said in a fresh note that Apple has a competitive edge over others with its on-device AI.
“Consumers may find purchasing Microsoft’s AI PC confusing (calculating whether it reaches 40 TOPS before purchase), whereas Apple directly tells consumers which models can support Apple Intelligence. Regardless of whether on-device AI applications meet consumer needs, Apple has a clear selling advantage from the start,” Kuo said.
Apple Inc. (NASDAQ:AAPL) is trading at 27x its 2025 EPS estimate, which is still a high multiple given the company’s 9.60% growth estimate for 2025 and 10.50% per-annum growth expected over the next five years. But all of that could change if Apple is able to actually implement and convert the AI features it recently announced at WWDC.
Dan Ives of Wedbush, one of the biggest Apple bulls, recently said that Apple Inc. (NASDAQ:AAPL) will be able to create an ecosystem around its AI offerings and the company would see a $30 to $40 per share surge because of its AI products. Ives has a $275 price target on Apple Inc. (NASDAQ:AAPL) shares.
The first signs of Apple Inc.’s (NASDAQ:AAPL) AI capabilities are here. Last month, the company revealed new M4-powered iPad Pro and claimed that its devices, powered by Neural Engine, will be “more powerful than any neural processing unit in any AI PC today.” Apple Inc.’s (NASDAQ:AAPL) Neural Engine is the company’s neural processing unit (NPU) that accelerates AI workloads.
Notable Wall Street analyst and Deepwater Asset Management Managing Partner recently made waves when he said in a post on Twitter that Apple Inc. (NASDAQ:AAPL) is a better investment than Nvidia for the long term. Munster believes “owning Apple Inc. (NASDAQ:AAPL) over the next year will have a higher return because the market is in denial about Apple’s AI potential.
RiverPark Large Growth Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL): Apple shares were a top detractor in the quarter. The company’s stock was pressured by negative news items including a government antitrust case, an Apple Watch patent dispute, and slowing China iPhone sales. Ultimately the company’s fiscal 1Q24 earnings report delivered a slightly better than expected quarter, but with guidance that disappointed investors. 1Q24 revenue and gross margin were better than feared, buoyed by stronger than expected worldwide iPhone sales which grew 6% despite a slight decline in China iPhone sales. Services revenue in the quarter was as expected and signaled the third quarter in a row of accelerating growth. Gross margins were also stronger than expected at 45.9%, the highest level in more than a decade. Guidance of $90 billion of revenue for 2Q24 was light however, due to weaker than expected iPhone sales in the current period and year-over-year declines in other hardware products facing difficult year-over year comps.
Although near-term trends are a bit muted, Apple is carrying lean inventory into an iPhone refresh cycle later this year. With an installed base of 2.2 billion active devices and significant growth of the company’s recurring revenue Services segment, we believe that Apple remains one of the most innovative, best positioned and most profitable companies in the mobile technology industry.”
