Steve Eisman, the hedge fund manager who predicted the subprime crisis, estimates that Apple is the technology giant expected to generate the highest profits from the field of artificial intelligence.
“Everyone is focused on the cloud,” Eisman said this week in an interview with CNBC. “But when the applications appear, the biggest beneficiary will probably be Apple, because it is the one that will be able to refresh all its products with the help of the royal intelligence tool.”
“When there are artificial intelligence applications that the consumer can use, they will want to use them on the phone,” Eisman said. “I have a new iPhone, and I know for a fact that when all these apps come to my phone, I’m going to need a new phone, and I’m going to need a new iPad, and I’m going to need a new laptop.”
Eisman, who currently serves as a senior portfolio manager at Neuberg Bremen, also adds that investors will have to be patient in light of the fact that artificial intelligence-driven applications need time to develop.
Apple stock is still reeling
Eisman’s words come at a good time for the technology giant, given the weak performance of its stock. Since the beginning of the year, the stock has risen Dark Only about 3% while the rest of the “Magnificent Seven” left her dust (apart from Tesla): Nvidia increased by about 97% since the beginning of the year, Meta flies at 35%, Google jumped by about 28%, Amazon in 22%, andMicrosoft climbed by 16%.
The shuffling in Apple’s stock is mainly due to the fact that the technology giant is suffering from increasing competition, and is losing market share, along with conflicts with regulators around the world and an image of weakness in the hot field of artificial intelligence. If all this wasn’t enough, even its latest launch, the Vision Pro helmet, didn’t go as planned and was mostly criticized for its excessive price ($3,500), which, according to estimates, also translated into weak sales.
Following on from that, Apple’s value currently stands at $2.9 trillion and has slipped to second place on the list of the largest companies in the world, while Microsoft has taken the title with a market value of $3.2 trillion.
Is the Apple comeback coming?
Despite the string of blows that Apple took in the last year, similar to Eisman, there are quite a few optimistic voices on Wall Street regarding the iPhone manufacturer. At the end of April of this year, the American investment house Bernstein upgraded for the first time since 2018 the buy recommendation of Apple stock from neutral to positive, causing it to jump by 2.5% all at once in one trading day – an addition of about 67 billion dollars to the company’s value in just one day.
Apple’s troubles, according to the analyst who issued the forecast, Tony Skonagi, are not as terrible as they are reflected in the public discourse and the media. More than anything, the company hints that Apple traded at quite low multiples compared to the figure its investors have become accustomed to in recent years, and because of that the investment house identified a buying opportunity that would allow them to reap a return in the future, and provide an optimistic forecast for a share price that they estimate could return to $195 compared to the current price of $190.
At the same time, it seems that investors were optimistic about Apple’s financial results when the stock jumped after the publication of the reports at the beginning of May, apparently in light of the technology giant’s announcement that it would carry out a $110 billion share buyback, the highest ever. At the same time, Apple reported revenues of 90.8 billion dollars, a decrease of 4% but above the analysts’ forecasts of 90 billion dollars. In the line of earnings per share, the company reported $1.53 per share, thus surpassing the early expectation of $1.5 per share.
In addition, it seems that Apple’s efforts to increase its iPhone sales (mainly in China) are indeed succeeding. After Apple significantly reduced iPhone prices in the country at the beginning of 2024, an increase of about 12% in sales was recorded in March.
Finally, also regarding the field of artificial intelligence there are quite a few speculations that Apple will enter the field soon. Just two weeks ago, Bloomberg reported that after talks with OpenAI and Google about their artificial intelligence models, Apple is taking steps towards closing a deal with OpenAI to use the technology in the iPhone, as part of the effort to bring more artificial intelligence (AI) features to Apple devices.
The companies are reportedly finalizing terms for an agreement to use ChatGPT features in Apple’s iOS 18, the next iPhone operating system, the people said, speaking on condition of anonymity. If a deal with OpenAI closes, Apple could offer a popular chatbot along with other new AI features it plans to launch as early as next month. However, there is no guarantee that the deal will happen soon, it was reported. Representatives for Apple, OpenAI and Google declined to comment.
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