Key Takeaways
- Apple will kick off its Worldwide Developer’s Conference (WWDC) on June 10, with investors likely to be watching for announcements related to artificial intelligence (AI).
- The iPhone maker is expected to unveil iOS 18 and may showcase new AI features.
- Analysts anticipate that new iPhones with built-in AI capabilities could fuel an accelerated iPhone upgrade cycle.
- The company could also comment on reports that it is in talks with Google and OpenAI to integrate AI tech into Apple devices.
- Analysts said WWDC could move Apple’s stock, but may not be as big of a catalyst as the iPhone 16 announcement expected in the fall.
Apple (AAPL) is set to hold its annual Worldwide Developer’s Conference (WWDC) keynote on June 10, kicking off the five-day event, with investors likely to be watching for any updates on the company’s artificial intelligence (AI) game plan.
New AI Features and iOS 18 Expected
The iPhone maker is expected to unveil its latest operating system, iOS 18, as well as generative AI features built into Apple apps like iMessage, Photos, and Safari.
Apple recently announced a new iPad Pro powered by its latest chip, the M4, which can support running AI applications locally, marking a key milestone in Apple’s push into AI. Previously, the company had been relatively quiet about its AI initiatives compared to many of its big tech peers.
Analysts indicated that while they don’t expect Apple to unveil the new iPhone 16 until the fall, the company could still reveal some AI-related updates.
“We see more of Apple’s AI announcements occurring in September at the iPhone 16 launch than at WWDC, but see WWDC as directionally positive as well,” Bernstein analysts said.
AI-Fueled iPhone Upgrade Cycle
Bank of America analysts indicated they anticipate “upcoming AI enabled phones (IntelliPhones) to drive a multi-year upgrade cycle similar to the step function improvement driven by the introduction of smartphones.”
The analysts said they “expect the adoption curve of AI phones to be faster than the adoption of smartphones, 5G,” and that “with an installed base of over 4bn smartphones,” Apple could have an opportunity for the next upgrade cycle to be a “once in a decade type of event.”
Potential AI Partnership
The company could also comment on recent reports of a potential partnership with Microsoft-backed (MSFT) OpenAI and Alphabet’s (GOOGL) Google.
An agreement could license the companies’ respective AI models, GPT-4o and Gemini, to integrate the AI tech into Apple software and devices. An AI partnership with OpenAI or Google may also catalyze a major upgrade to Apple’s voice assistant Siri.
How AI Announcements Could Affect Apple Stock
Melius Research analysts said that “Apple’s stock is gearing up for a run” as the upcoming WWDC could be 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 so for Apple as well.
Melius said “WWDC announcements are likely to drive iPhone units with a higher ASP at some point soon” and 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 shares have gained about 7.5% over the past 12 months and 0.3% since the start of the year, at $193.05 per share as of 2:50 p.m. ET Monday.