Apple Poised for a Summer Rally: Key AI Innovations Could Boost Stock Performance

TipsForTraders | May 28, 2024

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As summer approaches, the defining trend of 2024 has been the meteoric rise of artificial intelligence (AI), significantly benefiting major technology stocks. Surprisingly, Apple Inc. (Nasdaq: AAPL) has not shared in this AI-driven boom, lagging behind its tech peers. However, the upcoming Worldwide Developers Conference (WWDC) on June 10th might mark a turning point for Apple, potentially catalyzing a significant stock rally throughout the summer and into the fall.

Current Performance of the Magnificent Seven

The performance of the so-called “Magnificent Seven” tech stocks highlights Apple’s underwhelming year-to-date returns. According to S&P Capital IQ data:

  • NVIDIA (Nasdaq: NVDA): Up 121%
  • Meta (Nasdaq: META): Up 38%
  • Alphabet (Nasdaq: GOOGL): Up 27%
  • Amazon (Nasdaq: AMZN): Up 21%
  • Microsoft (Nasdaq: MSFT): Up 16%
  • Apple (Nasdaq: AAPL): Up 2%
  • Tesla (Nasdaq: TSLA): Down 28%

While Apple’s 2% increase outperforms Tesla’s 28% decline, it pales in comparison to the S&P 500’s 11.8% rise and the Nasdaq Composite’s 14.6% return. Tech giants like NVIDIA, Meta, Alphabet, Amazon, and Microsoft have all outperformed the market, fueled by AI optimism.

NVIDIA, a leader in AI, reported a staggering 427% year-over-year revenue growth in its Data Center group. Meta’s extensive investments in AI have enhanced ad targeting and boosted products like Reels, with its Llama 3 model gaining widespread acclaim. Alphabet, after some initial struggles, has successfully integrated AI across its product line, showcased during its recent I/O Event. Amazon and Microsoft have seen renewed revenue growth in their cloud computing segments due to rising AI demand. Even Tesla, despite its overall stock decline, has gained momentum by focusing on self-driving technology.

Apple’s Struggle with AI Adoption

Apple’s recent stock performance has been largely driven by a major share buyback announcement rather than product innovation. The company’s Vision Pro, expected to be a groundbreaking product, failed to generate significant excitement. Moreover, Apple’s sales have declined, with a 4% year-over-year drop last quarter.

Despite these setbacks, Apple has the potential to pivot and harness AI’s transformative power. The WWDC on June 10th is anticipated to feature several AI-driven innovations, potentially redefining Apple’s narrative.

Upcoming AI Innovations at WWDC

Here are key AI features expected to be unveiled at WWDC:

  • Project Graymatter: A suite of AI tools integrated into apps like Safari and Photos, enabling advanced photo editing capabilities.
  • Enhanced Siri: Leveraging advancements in large language models (LLMs) to significantly improve Siri’s functionality.
  • Generative AI: Introduction of generative AI for creating custom emojis based on text conversations.
  • Smart Recaps: AI-enhanced notifications tailored to user interests.

While these features may not be revolutionary individually, they signify Apple’s strategic shift towards prioritizing AI. The anticipated September event, where Apple will likely announce the next iPhone, could further bolster this AI-focused strategy, potentially featuring partnerships with AI leaders like OpenAI or Google.

Apple’s Unique AI Advantages

Apple possesses several underappreciated advantages in the AI space. One significant edge is its control over hardware and software integration. Apple’s A-series chips, found in its devices, include dedicated AI processors branded as the “Neural Engine.” This allows Apple to execute AI tasks locally on devices, reducing reliance on cloud-based processing. In contrast, companies like Google must manage the substantial costs of cloud infrastructure to deliver AI services.

This localized processing capability not only enhances user experience but also represents a potential multi-billion-dollar advantage for Apple.

Growing Wall Street Optimism

Wall Street sentiment towards Apple is shifting positively. Dan Ives of Wedbush recently raised his price target for Apple from $250 to $275, citing potential AI-driven growth. He anticipates a “supercycle” of AI features could add $30 to $40 to Apple’s stock price. Apple is projected to deliver an EPS of $2.31 this holiday season, a 6% increase from the previous year’s $2.18. Even a slight beat, say $2.35 in EPS, could generate enough optimism to push the stock above $200 per share by early next year.

Key Takeaways

  • Current Market Performance: Apple’s 2% year-to-date return lags behind other major tech stocks driven by AI enthusiasm.
  • Upcoming WWDC: The June 10th event could showcase AI innovations that reframe Apple’s market position.
  • AI Features: Project Graymatter, enhanced Siri, generative AI for emojis, and smart recaps are expected highlights.
  • Strategic Advantages: Apple’s control over hardware and software offers a significant AI edge, reducing cloud reliance and associated costs.
  • Wall Street Optimism: Increased analyst price targets and potential EPS growth could drive a strong stock performance.


Apple’s stock performance in 2024 has been underwhelming compared to its peers, but the WWDC on June 10th could be a pivotal moment. With anticipated AI features and strategic advantages, Apple has the potential to leverage AI enthusiasm and drive significant stock gains. As Wall Street’s outlook improves, investors might find Apple to be a compelling stock to own this summer.