As Apple Stock Trades At Record, Analyst Says Tech Giant Will Spearhead Edge AI Adoption In 2025: Retail Stays Upbeat

Apple, Inc. ($AAPL) rolled out its newest operating system iterations this week, which launched several new Apple Intelligence features on its hardware products, including the iPhone.

An analyst at Morgan Stanley sees artificial intelligence (AI) opportunities broadening from generative AI players to edge AI companies in 2025. Broadening of AI Apple Intelligence features and their adoption, alongside further innovation in other consumer AI platforms such as Alphabet, Inc.’s ($GOOGL) ($GOOG) will be important catalysts driving the change, said Morgan Stanley’s Erik Woodring. 

The analyst said consumer products will likely be the first to move the needle in this direction. He noted that several smartphone OEMs, including Apple, Samsung, Google and Xiaomi Corp. (OTC: XIACF) have launched dedicated AI strategies to drive smartphone upgrades.

Also, AI-dedicated applications such as Microsoft Corp.’s ($MSFT) CoPilot, Google’s Gemini and Apple Intelligence, have all moved from test/development into production, he added.

Woodring noted that edge AI enablers have underperformed AI infrastructure enablers by 50 basis points this year. The analyst believes the dynamics could shift. Morgan Stanley’s survey of chief investment officers showed that 84% of respondents expressed interest in AI PCs. The firm’s global smartphone survey showed that access to advanced AI features, and access to the latest generative AI technology will likely among the most important factors driving smartphone upgrades over the next 12 months. 

The retail crowd has become factoring in this opportunity. Sentiment toward Apple stock is ‘bullish’ (55/100) on the Stocktwits platform, with trader chatter regarding the stock remaining at ‘high’ levels. 

AAPL sentiment and message volume December 13, 2024, as 12:09 am ET | Source: Stocktwits

Apple stock has picked up strong momentum since bottoming in early November following a period of consolidation. 

The stock topped the $250 psychological barrier on Wednesday and finished at a record high of $247.96 on Thursday. The stock has gained over 29% this year, in line with the gain notched by the Global X Artificial Intelligence & Technology ETF ($AIQ).

The Technology Select Sector SPDR Fund ($XLK) has risen a more modest 24% during the period.

Notwithstanding the potential near-term opportunities, sell-side analysts hold a dim view about the one-year stock trajectory. Consensus analysts’ price target ($242.51) compiled by TipRanks suggests a likely 2.20% downside from current levels.

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