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What will it take to break free from the slump in Apple stock and iPhone sales? Wall Street analysts and clubs see artificial intelligence as a key driver of investor enthusiasm and the next upgrade cycle. JPMorgan said in a note Thursday that the expected AI-powered iPhone will generate strong demand similar to when Apple included 5G capabilities on the iPhone 12 in October 2020. At the time, customers who wanted faster, next-generation mobile connections were upgrading — which boosted Apple’s revenue and profits, and ultimately its stock price. As we know, stronger fundamentals of a company often lead to higher stock prices. An increase in iPhone demand that rivals the 5G craze of the past few years will be welcome news for club organizers. Details about Apple’s AI offerings are limited, but management’s track record shows that new and innovative features on Apple’s devices improve the overall user experience. So, in Club’s view, why should AI integration be any different? Apple’s success will never be determined by being first to market. Apple’s iPod wasn’t the first digital music player. The iPhone wasn’t the first smartphone. The company’s secret has always been to build better mousetraps and embed them into an ecosystem that users never want to leave. We expect to learn more about Apple’s AI strategy at the company’s annual Worldwide Developer Conference (WWDC) in June. AAPL YTD Mountain Apple YTD Apple shares posted their best single-session gain (up 4.3%) since May of last year on Thursday, in a day when tech stocks soared on even optimistic prospects for AI. Bloomberg reported that Apple is preparing new Mac laptops with the AI-focused M4 chip. This report has not been confirmed, and Apple declined CNBC’s request for comment. Apple shares continued to rise modestly on Friday, countering a broader market selloff caused by a big reversal in tech stocks. It was the club’s best performing stock this week. Still, after rising 48% last year, Apple stock is down nearly 9% so far in 2024. For comparison, the S&P 500 is up 7% since the beginning of the year. On the surface, 2024 is off to a rough start for Apple. Analysts are questioning the stock’s valuation, ostensibly concerned about iPhone sales. Investors’ concerns only grew as data revealed the extent of the slump in iPhone sales in China. Foreign and U.S. regulatory headwinds from the Justice Department’s landmark antitrust case are also weighing on the giant stock’s name. The club sold part of Apple on the first trading day of the new year, along with seven other big tech stocks. Apple’s 2023 rally has expanded its position beyond a 5% weight, but the club does not like to exceed this weight for any stock in its portfolio. Therefore, the profit was taken, but the trim was focused on resizing the position. Despite this, Jim Cramer has stuck to Apple’s mantra of “Own it, don’t trade it.” He has repeatedly argued that riding out Apple’s stock market ups and downs is the best way to profit from the stock. He called Apple “one of the best performers of all time” and encouraged members to “patience, patience, patience” with the stock. Jim said Thursday that investors “need to have faith. [management] When it comes to AI, the team is going to have great things,” Jim said, citing a report from Bloomberg, adding, “If we can put these AI chips in the Mac, we can do it in the iPhone.” . We need to do something else to foster growth, but we’ll see, and I think now is the time to believe that. [CEO] Tim Cook will figure it out. (The Jim Cramer Charitable Trust is long his AAPL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, Jim raises money Receive trade alerts before trading. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in the charitable trust’s portfolio. If Jim talks about stocks on his CNBC TV, he will wait 72 hours after issuing a trade alert before executing a trade. The above investment club information is subject to our Terms of Use and Privacy Policy, and together with our disclaimer, no fiduciary duty or obligation exists by receipt of information provided in connection with an investment club. Specific results or benefits are guaranteed.
Apple Store in Hamburg, Germany.
Christian Carisius | Picture Alliance | Getty Images
What do I need to get apple How to get out of the slump in stock prices and iPhone sales? Wall Street analysts and clubs see artificial intelligence as a key driver of investor enthusiasm and the next upgrade cycle.
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