We recently published a list of 10 Best AI Stocks for the Second Half of 2024. Since Apple Inc (NASDAQ:AAPL) ranks 5th on the list, it deserves a deeper look.
Wedbush Securities in a fresh note said mega-cap tech stocks have a 15% upside in the second half of 2024, driven by AI. Wedbush analyst Dan Ives, who has been beating the AI drum and thinks the AI “party” is just getting started, wrote that the $4 trillion AI arms race is between major tech players and GPU chips have become the new oil or gold in the tech industry.
Ives wrote that he thinks NASDAQ will have another strong second half of the year.
“Tech stocks will be up 15% the rest of 2024 in our view with tech fundamentals set to accelerate as AI use cases materially expand.”
While Ives continues to see the major tech stocks leading the AI market, he thinks the AI-led rally can broaden out to tech companies who have strong “installed” bases which can actually use generative AI applications and models.
Last month, while talking to CNBC, Ives said that the tech bull market is going to last for at least two more years. When asked what could be the threat to this bull run, Ives said that China could be a threat amid a possibility of “tech cold war” but he thinks that is a “contained threat.”
“It started off with the semis, but now it’s started to happen is, the demand and the use cases” are expanding to other companies. Ives called the AI boom the “fourth industrial revolution.”
We picked top AI stocks from Wedbush’s latest note. The firm named some of these stocks as the best picks for the second half of 2024 while called others “oversold” tech stocks. With each stock 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).
Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 150
Apple is among the top picks of Wedbush’s Dan Ives for the second half of 2024.
TF International Securities analyst Ming-Chi Kuo also said in a fresh note that Apple has a competitive edge over others with its on-device AI.
Notable Wall Street analyst and Deepwater Asset Management Managing Partner Gene Munster 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.
Apple Inc (NASDAQ:AAPL) is trading at 26X its 2025 EPS estimate ($7.22). This multiple, though higher than the industry average of 30, does not show the stock’s overvalued, given Apple Inc (NASDAQ:AAPL) sales growth of 6.40% for fiscal 2025 and 10.50% growth for the next five years on a per-annum basis.
Mar Vista Focus strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Apple Inc.’s (NASDAQ:AAPL) stock was pressured in the quarter as investors fretted over softening demand for smartphones, regulatory action from the US Department of Justice, and the Chinese government mandates restricting iPhone use by government officials. Despite these near-term headwinds, we continue to believe the company remains competitively advantaged and benefits from the Apple ecosystem, which has an installed base of over 2 billion devices and over 1 billion paying subscribers. We believe the Apple ecosystem will support a more predictable cash flow stream, which should grow intrinsic value high-single-digits over our investment horizon.”
Overall, Apple Inc. (NASDAQ:AAPL) ranks 5th on Insider Monkey’s list titled 10 Best AI Stocks for the Second Half of 2024. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), our conviction lies in the belief that 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.
