Apple Inc.'s (NASDAQ:AAPL) highly-anticipated AI strategy, set to be announced at the Worldwide Developers Conference (WWDC) in June, has Wedbush's Dan Ives excited.
What Happened: Ives thinks that the "AI revolution" is headed for Cupertino next, given that it is the only company in the "Mag 7" that hasn't had any major AI announcement yet.
In an interview with CNBC, Ives said, "Next six to nine months, it's going to be an AI-driven super cycle with iPhone 16."
Ives implies that Apple's upcoming AI features will entice users to upgrade to newer iPhones. "Look at China – 230 million iPhones, yet 70% of them have not upgraded in the last three years."
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"AI revolution now coming to Cupertino," he remarked.
Apple reported an 8.1% decline in iPhone sales in Greater China – this includes mainland China, Hong Kong, and Taiwan – far better than analyst predictions of up to a 19.1% fall.
Ives explains that this could be due to a pickup in iPhone sales in March and that it bodes well for Apple over the next six to nine months. He expects Apple to register a growth in iPhone sales in China in the September quarter.
"When you look at the next six, nine, twelve months, that renaissance of growth is coming back to Cupertino, combined with the AI story."
See Also: ‘Have You Used Siri Lately?’ Elon Musk Answers MKBHD After Tim Cook Teases ‘Exciting’ AI Developments From Apple This Year
Why It Matters: Apple's upcoming AI strategy is being watched closely by analysts.
Echoing similar sentiments as Ives, Tesla Inc. investor Ross Gerber thinks that Apple's AI announcements will lead to an upgrade cycle for the company.
Apple is currently in talks with Alphabet Inc.'s Google as well as Microsoft Corp.-backed OpenAI to license either of their AI models for the iPhone. The company is separately developing its own generative AI solution dubbed "Project Graymatter," expected to debut with iOS 18 later this year.
Also helping Apple's case is Tim Cook's recent China visit, which Deepwater Asset Management’s Gene Munster thinks is a message to the Xi Jinping administration that “Apple is committed to China.”
Price Action: Apple’s stock closed 5.98% up at $183.38 on Friday, according to Benzinga Pro.
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