Apple will be "a dominating force in consumer AI" thanks to its unique advantages, a Wall Street analyst said in a report. But Apple stock fell Friday amid an overall down day for the market.
Oppenheimer analyst Martin Yang reiterated his outperform rating on Apple stock and raised his price target to 250 from 200.
On the stock market today, Apple stock dropped 1.6% to close at 210.62.
"We believe that Apple's introduction of Apple Intelligence will position the company as the leader in the consumer AI experience," Yang said in a client note Friday.
Apple's Ecosystem Advantage
The deep integration of artificial intelligence functions in the upcoming iPhone software release, iOS 18, eliminates concerns that Apple is falling behind rivals in AI, Yang said.
Apple will benefit from its unique ecosystem advantage that marries proprietary hardware and software, he said. Plus, Apple's AI will draw on users' personal context with an emphasis on data privacy, Yang said.
Apple announced its AI strategy, branded Apple Intelligence, on June 10 at its Worldwide Developers Conference.
"We suspect that WWDC showcased only a fraction of what Apple Intelligence could do in the future," Yang said. "We expect Apple Intelligence to produce even stronger synergies between different Apple hardware products. Better hardware synergy enables Apple to create a wider and deeper moat once a user enters the ecosystem through iPhone, Mac, iPad, or Apple TV."
Apple Stock Upgraded To Buy
On Wednesday, Rosenblatt Securities analyst Barton Crockett upgraded Apple stock to buy from neutral. He also upped his price target to 260 from 196. Apple stock notched a record high of 220.20 on June 12 before pulling back.
Apple's privacy-focused approach to AI should resonate with consumers, Crockett said. Also, Apple isn't spending billions of dollars on data center infrastructure to support AI ambitions like its Big Tech rivals, he said.
Apple stock has an IBD Composite Rating of 91 out of 99, according to IBD Stock Checkup.
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