- Wall Street was definitely impressed by Apple's WWDC event on Monday.
- The integration of OpenAI, a more conversational Siri, and an emphasis on privacy were key highlights.
- Analysts predict AI features will drive significant upgrade cycles for the iPhone 16 and iPhone 17.
Apple's unveiling of its artificial intelligence capabilities at WWDC on Monday failed to impress investors as the stock fell 2%, but it did impress Wall Street in a big way.
A more conversational Siri, the integration of OpenAI, and an emphasis on privacy should help boost Apple device sales for the long-term, according to several Wall Street analysts.
"Best WWDC ever," analysts at Citi said, concisely summarizing Wall Street's view that the integration of AI into Apple's hardware lineup could supercharge the company's growth after nearly two years of flat revenue growth.
Here's what Wall Street is saying about Apple's WWDC event.
Goldman Sachs: 'Should help to drive upgrade demand'
Analysts at Goldman Sachs said the software announcements at WWDC on Monday should drive hardware sales as the new AI capabilities are only compatible with the iPhone 15 and Macs with M1 chips or better.
"We're encouraged by the financial implication of today's announcements, with product features that should help to drive upgrade demand for products, leaves an opportunity for more direct AI monetization in the future, and potentially mitigate compute costs by allowing users with paid ChatGPT accounts to link to Apple accounts," Goldman Sachs analyst Michael Ng said.
Goldman Sachs rates Apple at "Buy" with a $238 price target.
Citi: 'Best WWDC ever'
"We believe Apple's WWDC was the best WWDC conference in a long time as it introduced 'AI for the rest of the people," analysts at Citi said.
The firm said as AI features become available in the fall, combined with an iPhone 16 launch, a supercycle in iPhone upgrades should begin to materialize and cap off with the iPhone 17 in 2025.
"We expect all IP16 models to be AI capable with IP17 to drive the super cycle refresh as developers will have a whole year to develop apps," Citi analyst Atif Malik said.
Citi rates Apple at "Buy" with a $210 price target.
JPMorgan: AI to drive emerging market upgrade cycle
With Apple's new AI features being compatible only with the iPhone 15 Pro models and future iPhones, JPMorgan analysts believe that that will spur a big upgrade cycle in emerging markets.
"While the availability of the AI features on iPhone 15 Pro models might appear on the headline as offering backward compatibility in some sense, we believe it will serve to accelerate the AI-related upgrade cycle in multiple emerging markets where local market demographics lead Apple to focus marketing on the last generation of the iPhone line up with affordability for the consumer in mind," JPMorgan analyst Samik Chatterjee said.
Chatterjee echoed Citi's thoughts that the AI features should drive a massive upgrade cycle for the iPhone over the next two years.
"We continue to expect the start of a device upgrade cycle for iPhones later this fall with the upgrade cycle likely peaking with the launch of the iPhone 17 in 2025," Chatterjee said.
JPMorgan rates Apple at "Overweight" with a $225 price target.
Wedbush: 'Changes the game for Apple'
Wedbush analyst Dan Ives said Apple Intelligence "changes the game" for the company as it leverages its massive installed base to roll out and refine its AI technology.
"For developers, Apple is looking to tap into customer data then monetize on top of that so this technology stays within the ecosystem while developers have to tap into this," Ives said.
"This was a historical day for Apple and Cook and Co. did not disappoint," Ives said.
Wedbush rates Apple at "Outperform" with a $275 price target.