Apple Shares Surge: What This Means for AI Growth Efforts

Apple’s AI bet has paid off, with its shares having skyrocketed to a record high this week (July 2024). In fact, according to Reuters, Morgan Stanley raised its price target on the tech giant’s shares, designating the company’s stock as a top pick on account of its AI efforts.

With shares having risen to US$236.30, Apple now has a market value of US$3.62tn - the highest currently in the world. According to analysts at Morgan Stanley, this is a direct consequence of AI boosting iPhone and iPad shipments.

This comes in the wake of Apple having unveiled Apple Intelligence last month, in a bid to accelerate its AI strategy. 

The company fell behind its competitors, including the likes of Alphabet, Microsoft and OpenAI, last month on account of not harnessing AI early enough. Now, it seeks to help customers upgrade their devices to use the technology.

Getting on board the Gen AI hype

Apple made big plans at the start of 2024 to start incorporating AI technology into its products, as announced by company CEO Tim Cook. Its use of Gen AI technology is currently only compatible with 8% of iPhone and iPad devices and 1.3 billion units of smartphones currently in use by its customers. 

According to Morgan Stanley, Apple could sell nearly 500 million iPhones over the next two years and is expected to lead the charge in global smartphone market recovery this year as a result of Gen AI. 

In this vein, the iPhone maker is experiencing rapid growth around the world. In particular, it was recently reported that the company had a 33% increase in its India sales.

The growth of Gen AI is taking the world by storm, with a trillion-dollar global IT spend predicted for 2024. Now, businesses are starting to invest heavily into the technology in order to meet customer demands, enhance their productivity and create innovative operations.

Gen AI also requires enormous levels of computational power and data storage. Training large language models (LLMs) like GPT-4, which forms the crux of many Gen AI applications, also demand massive processing capabilities.

Apple Intelligence: Prioritising Gen AI

Launched in June 2024, Apple Intelligence aims to set a new standard for privacy in AI. It aims to understand personal context to deliver intelligence that is both helpful and relevant to users.

For iPhone, iPad and Mac, Apple Intelligence is designed to combine the power of generative models with personal context. It uses the power of Apple silicon to understand and create language and images, take action across apps and draw from personal context to simplify and accelerate everyday tasks. 

Speaking at the time of launch, Tim Cook said: “Our unique approach combines generative AI with a user’s personal context to deliver truly helpful intelligence. And it can access that information in a completely private and secure way to help users do the things that matter most to them. This is AI as only Apple can deliver it, and we can’t wait for users to experience what it can do.”

The company seeks to scale computational capacity between on-device processing and larger, server-based models that run on dedicated Apple silicon servers. It aims to offer AI capabilities to a range of its features, including Siri, iMessage and the Notes app, among other things.

In addition to its new partnership with OpenAI, privacy protections will be built for users who access ChatGPT. The AI chatbot model will come to iOS 18, iPadOS 18 and macOS Sequoia later in 2024 and will be powered by GPT-4o, which users can access for free without creating an account.

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