Apple's AI Push at WWDC Boosts Stock, but Challenges Remain

Apple had a strong week following announcements at its annual developer event, allowing it to regain the top market capitalisation position. However, maintaining this lead remains uncertain.

Announcements to Please the Market

Apple's Worldwide Developers Conference (WWDC) is a much-anticipated event by shareholders as well as technology enthusiasts. The event delivered significant announcements this time around, resulting in Apple's stock price increasing over 7% in one day and outperforming the S&P 500 for the first time in a year. The upside continued throughout the rest of the week, allowing Apple to regain its position as the largest company by market capitalisation globally, which overtook Microsoft. However, whether it can maintain it depends on other factors, as this growth was primarily attributed to both companies' work in AI.

The primary highlight of WWDC 2024 was Apple's announcement of entering the AI market, called Apple Intelligence, along with enhancements to its virtual assistant Siri. Siri updates will allow users additional functionality by integrating with other AI systems. There was widespread expectation around new AI products, so this was not entirely surprising. However, the additional details satisfied developers and shareholders. In fact, the Apple Intelligence launch overshadowed announcements around the company's latest operating system, iOS18.

​Setting Up for the Future

The most interesting features will become available on the new operating system, launched with developers at the start of the Conference, ahead of being rolled out to customers. Analysts believe the announcements could reinvigorate sales of iPhones and other devices, as customers may want to upgrade to access the latest features. The company has faced generally resistant consumers dealing with high inflation and interest rates while also needing to counter-improve offers from rivals like Samsung and Chinese smartphone developers. It is hoped that the current announcement package will help overcome those obstacles.

Less optimistic observers point to investor frustration with Apple's not focusing enough on AI and relying on a competitor—ChatGPT partnered with Microsoft—as a salient feature of its digital assistant. They worry it may not be enough to drive consumer purchases of new devices, and proof will come with the latest iPhone 16 release expected in autumn. Apple's flagship iPhone sales were down last year compared to the prior year. Now, it is simply a matter of awaiting sales data.

Measured-Move Reveals Potential

Based on its previous corrective structure, Apple stock could reach $235 in the near future, as indicated by the measured-move projection of the $250-165 leg. Looking further ahead, $250 and $300 are considered the next round levels amidst price discovery dynamics. However, if sentiment shifts and the bulls lose the support at $180, this could signal further declines. ​

Source: SpreadEx / APPLE

Key Takeaways

Apple regained its position as the largest company globally following announcements at its annual developer event that saw its stock rise over 7% in one day, including its launch of Apple Intelligence and enhancements to Siri. However, maintaining this lead depends on other factors and proof will come with upcoming iPhone 16 sales data.