Apple Eyes Best Week Since 2021 on Bet AI iPhones Are Must-Haves

tech.hindustantimes.com:

Apple Inc. investors finally have a roadmap for how it will use artificial intelligence — and they've responded by pushing the stock toward its best week in more than two years. 

Wall Street is betting that new iPhone AI features — including Apple's agreement with OpenAI to integrate ChatGPT — will spur a massive upgrade cycle among users who have been holding on to older devices. 

Investors have “more confidence that Apple is back in the game, that it has caught up competitively, and that it will see a re-acceleration of growth, given the installed base of phones that will need to upgrade to take advantage of this new tech,” said Jim Awad, senior managing director at Clearstead Advisors. “Apple will be a major beneficiary of AI, and the stock is catching up.”

Wall Street's top stocks have quickly re-shuffled on AI optimism. Apple on Thursday overtook Microsoft Corp. as the biggest company by market capitalization. Apple was third-largest as recently as Monday, trailing behind $3.2 trillion Nvidia Corp, and Microsoft, which held pole position since January. 

The iPhone maker is set for its biggest one-week percentage gain since 2021, climbing to a fresh record high. Since an April trough, the stock has added more than $700 billion in market value. Buy ratings on the stock are near the most since 2017.

While seen as short on surprises, Apple's event eased concerns that have weighed on the stock this year. Wall Street had fretted that the firm lacked an AI strategy, especially since its growth has been wanting compared with other megacaps, and its valuation is elevated. That has kept a lid on share-price gains; among the Magnificent Seven, only Tesla Inc. — down 27% — has seen a weaker performance.

Revenue fell 4.3% in Apple's fiscal second quarter, the fifth contraction in the past six quarters. Despite that, it trades at about 30 times estimated earnings, above its long-term average and the roughly 27 times multiple of the Nasdaq 100 Index.

The iPhone is by far Apple's