Insights

Apple adopts AI, but will it move markets?

By Paul Reid

11 June 2024

Apple AAPL AI

Apple's Worldwide Developers Conference (WWDC) 2024 has once again captured the attention of tech enthusiasts and investors alike. With a slew of announcements and updates across its product lines, Apple Inc. continues to demonstrate its innovative prowess. 

But is Apple falling behind on AI integration and do they have a plan to return to the forefront of innovation? Will the coming announcements be enough to boost AAPL? Let's look at the expectations and see what weight they carry.

What’s new for Apple?

This year we will see Apple introduce iOS 18, highlighting significant AI enhancements such as generative AI features for custom emoji creation, photo editing via voice commands, and smart content summaries in Safari. Siri is also set to receive substantial upgrades leveraging large language models​. The iPhone 16 is expected to feature larger displays, under-display Face ID, advanced camera systems including a periscope telephoto lens, and a new Capture button dedicated to photography.

MacOS 15 will also integrate many of the AI features seen in iOS 18, optimized for the powerful M3 chips. Although no new hardware expected in 2024, there are expectations of incremental updates to existing products and potential new releases later in the year.

Positive news, but is it enough to garner renewed interest from users and investors? For some years, Apple has seen a stagnation in iPhone model sales, likely due to limited improvements and lacking performance upgrades, but adding AI to devices might be exactly what will prompt iOS users to dip into their pockets for the new big thing.

AI is definitely on page one of Apple’s to-do list, and such an announcement should generate global interest, but how well the new AI functions get integrated is the real question, which won’t be answered on the release day. 

Overall, positive news for Apple, but perhaps insignificant for AAPL traders… for now.

Trading AAPL

Historically, Apple’s stock (AAPL) tends to experience volatility around major announcements. Positive reception of new features and updates can lead to brief bullish trends that are here today, gone tomorrow. For instance, Apple's stock saw a rise of approximately 2% following the announcement of the iPhone 13 at WWDC 2021, but the rapid trend didn’t last long.

Enhancements across Apple’s ecosystem, including AI integration and new software features, bolster the company's service revenue. Apple's services segment, which includes the App Store, iCloud, and Apple Music, accounted for $19.8 billion in revenue in Q1 2024, a 10% year-over-year increase. Big investors may take this as a long-term bullish signal, but they may be apprehensive (rightly so) about jumping in with both feet on the day.

Conclusion

Apple WWDC 2024 has set the stage for another year of innovation and market leadership. Traders should watch for immediate and shortlived stock price reactions, monitor supplier stocks for secondary opportunities, and consider the long-term growth potential driven by Apple’s continued ecosystem expansion.

As always, keep in mind that market sentiment can temporarily react to even the smallest of negative aspects, prompting a crash. We’ve seen it before with Google and Tesla, so tight Stop Loss (SL) might get triggered at the moment of release before rebounding with vigor.

Consider monitoring AAPL trades in real-time for the first few hours, but have some goals and limits in place in advance. Write them down on a notepad… it’s easier to stick to it when it’s in ink on paper.

Lastly, we won’t know if Apple’s AI integration is good until we start seeing the memes, so don’t be shocked if AAPL barely makes a bump on the charts on the day of release.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.