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Apple (NASDAQ:AAPL) was in focus on Wednesday after Rosenblatt Securities upgraded the tech giant, citing the potential benefit it may receive from its artificial intelligence initiatives.
Shares rose nearly 1% in premarket trading.
Apple is likely to benefit from the fact it has put an emphasis on privacy surrounding its AI initiatives (such as Privacy Cloud Compute) and could see an increase in market share as a result, Rosenblatt analysts said in a note to clients. The analysts raised their rating on Apple to Buy from Neutral and boosted its price target to $260 from $196.
Additionally, Apple’s approach to AI (including its partnership with OpenAI and others down the line) suggests that it will be immune to the rapid increases in cost that the hyperscalers have incurred, while still benefiting at the same time, Rosenblatt said.
Apple introduced ChatGPT integration in Siri at its developers’ conference earlier this month, starting with its newest large language model, ChatGPT-4o. If Siri needs to use ChatGPT, it will ask users with a pop up if they want to share with ChatGPT. Support for other AI models will come later, Apple said.
Apple said its AI updates, collectively known as Apple Intelligence, will be available for free with the new operating systems when they are released later this year.
Analysts are largely bullish on Apple (AAPL). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates AAPL a HOLD.