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Apple Is at Start of AI Supercycle, Wedbush's Ives Says

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Bloomberg Jun 17, 2024 14:14 · 20.9k Views

"For Apple, it's 9 p.m. in this AI party that I believe lasts until 4 a.m.," Wedbush Analyst Dan Ives says. Speaking on "Bloomberg The Close," Ives says Apple will reach a $4 trillion market cap a year from now.

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Transcript

  • 00:00 Do you think this massive historic
  • 00:03 ketchup and market cap,
  • 00:04 is that product AI driven or hey, this is mutual funds got it on the stock they got to buy?
  • 00:10 I think this was a historical week
  • 00:13 for Cupertino and Cook
  • 00:15 because you're unveiling now the AI strategy where I view
  • 00:19 it's going to lead to a renaissance of growth and we think 30 to $4.00 per share incrementally.
  • 00:24 Get to add to the story
  • 00:26 for Apple.
  • 00:26 It's 9:00 PM in this AI party
  • 00:30 that I believe last SO4 AM,
  • 00:32 9:00 PM in the.
  • 00:33 That is a great quote, Dan.
  • 00:34 I want to steal that puppy.
  • 00:36 What about mutual funds though, like how under owned or over owned or
  • 00:41 normally owned is a stock?
  • 00:43 I think it was very under owned.
  • 00:45 I think last skepticism
  • 00:47 going into even WWC and just in general what we're seeing with Apple, but I think many have missed the forest through the trees and we're betting against Cook and Cupertino has been the wrong move.
  • 00:58 And now OK, you, you still have a tough June quarter.
  • 01:01 But when you go into iPhone 16, what we see with AI, what I saw at Apple Park,
  • 01:06 you know, I believe it's get out the popcorn moment.
  • 01:08 I think this is the start of an AI driven super cycle
  • 01:12 and that's why I think why the bears this week, they've gone deep into their caves in hibernation mode.
  • 01:18 They certainly have Dan.
  • 01:19 And I think a lot of people are looking ahead to that next big hardware release to see what the uptake is going to be.
  • 01:25 I know it's too early to kind of put numbers on that, but is AI really going to be sort of that push the idea that those of us who maybe haven't upgraded in a while,
  • 01:33 this is going to be the thing that tips us over AI?
  • 01:36 Oh, I think it is.
  • 01:37 And I think that was
  • 01:38 the, even though it was a delayed reaction, what Cook
  • 01:41 talked about the WWDC because
  • 01:44 Apple intelligent, that's really going to be for iPhone 15 and later.
  • 01:47 And if you look and this is the most important thing, our estimates 270 million
  • 01:53 of 1.5 billion iPhones haven't upgraded in four plus years.
  • 01:57 That's why I believe this is going to be an unprecedented upgrade cycle next two years.
  • 02:01 And I believe a year from now we are looking at a $4 trillion mark cap.
  • 02:05 Wow, $4 trillion.
  • 02:07 And you think within a year that we can get there on Apple,
  • 02:10 I think you have 3-4 trillion dollar companies, the godfather of AI, Jensen, NVIDIA,
  • 02:15 Microsoft, everything Nadella and of course cooking crippled Tina.
  • 02:19 I mean,
  • 02:20 we're already kind of like we're at 3.3 trillion, right?
  • 02:24 So it's not
  • 02:25 that far in in essence.
  • 02:27 But
  • 02:28 Dan, I, my, my question really is when you have though overhangs like the EU, we had report from the FT that they're looking at potentially Apple going against their digital market laws like stuff like that.
  • 02:38 Are these material for Apple?
  • 02:39 How do you the notorious bull look at that
  • 02:43 look,
  • 02:44 did the DRJ issue, I mean, that's something that I think is much more important.
  • 02:49 And over the next three to four years
  • 02:51 that will be a bit of an overhang
  • 02:53 that I think eventually gets played out.
  • 02:54 But in the near term, the EU
  • 02:57 look
  • 02:58 getting fines and scrutiny from the EU for Apple, it's like drinking a cappuccino in the morning.
  • 03:04 That's not anything that they're not used to.
  • 03:06 So I don't really worry about that from a stock perspective.
  • 03:09 And I think right now we are on the precipice
  • 03:13 of a new age for Apple.
  • 03:15 Wow.
  • 03:15 I don't really know where to ask after that.
  • 03:17 Dan,
  • 03:18 what are the ancillary plays then in tech for that?
  • 03:22 Look, it's all about this AI revolution.
  • 03:24 And when you look at Apple clearly semis, it's going to be a huge
  • 03:28 tailwind.
  • 03:29 Additionally to what we see from a smartphone perspective,
  • 03:32 we see that all throughout our Asia checks
  • 03:35 and I think we are now starting to see the 2nd, 3rd, 4th derivatives of AI play out, but for Apple and the reason the stocks up this week despite skepticism going in
  • 03:45 because the consumer
  • 03:46 AI revolution
  • 03:48 now goes through the walls of Apple.