Key Takeaways
- Apple will kick off its highly anticipated Worldwide Developers Conference (WWDC) on Monday, with analysts suggesting artificial intelligence (AI) updates could lead to a move in Apple’s stock price.
- Analysts expect Apple to announce iOS 18, demo generative AI features built into apps, and potentially unveil an AI partnership, which could accelerate the iPhone upgrade cycle.
- Melius Research analysts said that Apple shares typically trade up into the event and then sell off, but noted that “these AI announcements have broken some well-known patterns for other stocks” and could do the same for Apple.
- Apple’s influence in major indexes and exposed funds could mean that a move in its stock price could affect the broader market.
Apple (AAPL) is set to kick off its highly anticipated Worldwide Developers Conference (WWDC) on Monday, with investors likely to be watching for any updates on the iPhone maker’s artificial intelligence (AI) initiatives, which could affect the company’s stock.
Analysts suggested announcements at the conference could give Apple a fresh opportunity to show investors it is well positioned in the AI era, and drive movement in its stock. As Apple has a significant influence on major indexes and exposed funds, a big move in its stock price could also affect the broader market.
What To Expect From WWDC
Analysts expect the iPhone maker to announce iOS 18, demo generative AI features built into apps, and potentially unveil an AI partnership, which could supercharge the iPhone upgrade cycle.
“It is widely believed that AAPL will announce a deal with OpenAI to integrate ChatGPT into iOS 18 (new AI features will likely be an opt-in service),” CFRA analyst Angelo Zino said. He added, “This is expected to make Siri much smarter, with the ability to chat and integrate AI across its ecosystem—editing photos, Safari web search, summarization of articles/meeting notes, easier coding, delete/send emails, AI-emojis, etc.”
Wedbush analysts said that WWDC is the “most important event in a decade for Cook & Co.” They reported they expect Apple to announce “a flagship OpenAI partnership will consist of an OpenAI Chatbot with exclusive features that build upon 1) on-device Apple LLMs and 2) cloud-powered Apple LLMs along with Apple powering AI on its own high end chips.”
JPMorgan analysts suggested WWDC could “‘tick all the boxes’ to convince investors that Apple is able to differentiate iPhone 16 (and future generations) with AI features relative to iPhone 15 and prior generations, and the same for future Mac and iPads, to successfully catalyze an upgrade cycle, while still debating the peak of the accelerated upgrade cycle.”
How AI Announcements Could Move Apple Stock
Melius Research analysts said that “Apple’s stock is gearing up for a run,” calling WWDC the most important annual conference “since the launch of the iPhone in 2007.”
The analysts said the stock “typically trades up into the event and then sells off,” though they noted that “these AI announcements have broken some well-known patterns for other stocks” and could do the same for Apple.
“WWDC announcements are likely to drive iPhone units with a higher ASP at some point soon,” Melius said, adding this could help “secure Apple’s high-margin services revenue growth for a long time,” adding that is “all that matters for the long-term investor.”
Apple Stock Move Could Affect the S&P 500, Nasdaq 100, and Exposed ETFs
As Apple has a significant influence on major indexes and exposed funds, a big move in its stock price could also affect the broader market.
The iPhone maker, which has a market cap of around $3 trillion, making it America’s second-most valuable company after Microsoft (MSFT), carries significant weight on the S&P 500 and the Nasdaq 100.
Apple makes up 6.24% of the S&P 500, making it the third-heaviest company by weight in the index, after only Microsoft at 7.2% and Nvidia (NVDA) at 6.4%, as of the start of June. The company has a weighting of around 8.11% in the Nasdaq 100, after Microsoft at 8.45% and Nvidia at 8.21%, reflected in the holdings of the Invesco QQQ ETF (QQQ), an exchanged-traded fund (ETF) mirroring the index.
So far this year, Apple shares have underperformed the S&P 500 and the Nasdaq 100, with Apple shares gaining close to 2% since the start of the year, at $195.94 as of around 12:30 p.m. ET Friday. The S&P 500 and Nasdaq grew more than 12% and 13%, respectively, in the same period.
TradingView
Despite its relatively weak performance so far in 2024, Apple stock has continued to lead Investopedia readers’ favorite stocks, according to the results of Investopedia’s most recent investor sentiment survey.
Apple is also a favorite among short sellers, as the second largest single-name equity short after Nvidia and Tesla (TSLA), according to S3 Partners analysis as of June 6. S3 reported outstanding short bets against Apple totaled more than $19.4 billion.
Firstrade President Don Montanaro told Investopedia that the online brokerage serving self-directed retail investors doesn’t have many clients placing bets against Apple, as Firstrade has “many die-hard Apple fans who are both short-term and long-term bullish on the stock.”
However, he added that Firstrade has observed “a pocket of perhaps more opportunistic traders who have taken to the sidelines on Apple stock over the past year, perhaps sorting out how Apple will fare” in the AI era, suggesting Apple’s AI developments could play a key role in shifting sentiment around the stock.