BofA Securities analyst Wamsi Mohan reiterated a Buy rating on $Apple (AAPL.US)$ with a price target of $265.
Reportedly, Apple is partnering with $Alibaba (BABA.US)$ to develop AI features for Chinese iPhone users. The companies co-developed Chinese AI features and have submitted them to China's cyberspace regulator for approval.
Mohan rerated Apple citing stable cash flows, earnings resiliency and potential beneficiary of AI use on edge devices.
On Apple's first-quarter earnings call, CEO Tim Cook noted that markets with Apple Intelligence on iPhone outperform markets where it is not yet available, highlighting Apple's desire for a global rollout of the feature. Apple's China revenues have fallen for six consecutive quarters as competitors Huawei and Xiaomi have gained a market share. Mohan noted that Apple could regain its share in the Chinese market if it could launch Apple Intelligence successfully to compete with Huawei and Xiaomi's currently available AI offerings.
Apple Intelligence is only available on iPhones in the U.S., Australia, Canada, New Zealand, South Africa and the U.K. However, It is available in the EU but only on Mac OS, with Apple noting that "many core features of Apple Intelligence" will roll out for EU customers on iPhone and iPad in April.
During their first-quarter earnings call in April, Apple announced they are releasing additional languages for Singapore, India and Simplified Chinese. Presumably, with the release of these new languages, Apple Intelligence will roll out on iPhones in the corresponding countries (except for China). When asked, Apple noted that the Chinese language rollout targeted Chinese speakers outside of China and did not indicate any pending rollout for China. In the December iPhone update, Apple integrated enhanced Siri with ChatCPT functions to expand Siri's abilities, but this feature is available only in the U.S.
Alibaba's LLM (large language model), QWEN, just launched the 2.5 model version at the end of January. It is said to surpass DeepSeek-V3 (performance metrics unknown).
Price Actions: At last check Wednesday, AAPL stock was up 0.83% at $234.56.
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