Apple (NASDAQ:AAPL) didn’t exactly overwhelm with its initial forays into AI, one of the principal reasons that its stock performance over the past year – while upbeat – didn’t enjoy the white-hot returns of some of its Magnificent 7 peers.
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Still, the company that staked its claim on thinking differently through the years can point to a strong performance in its last quarter, above and beyond the AI realm.
Apple’s total revenue of $143.8 billion was up 16% year-over-year, its highest sales figure to date. Operating cash flow of $53.9 billion also reached a new peak, while the company’s iPhone revenue of $85.3 billion (up 23% year-over-year) was also an all-time record.
So, maybe Apple doesn’t need to be an AI leader to continue being a central player in the tech space? Actually, top investor Daniel Sparks stands ready to argue that AAPL is actually an AI stock.
“Absolutely,” states the 5-star investor, who is among the top 1% of stock pros covered by TipRanks. “Apple gives investors a front-row seat to the consumer AI revolution while providing the safety of a highly profitable, cash-generating business.”
Sparks notes that Apple has entered into a partnership with Google to utilize the latter’s Gemini models for its Apple Intelligence features. The investor points out that embedding Google’s “highly capable” AI into its ecosystem could set Apple up nicely for a compelling hardware upgrade cycle.
Going further, Sparks predicts that Apple will enjoy years of high-margin device sales, while its “massive installed base” gives it a unique perch to dive into new software opportunities. He believes this could cause the company’s services segment to accelerate.
Overall, the investor is high on this “stealth AI powerhouse.” And, while we’re at it, he also thinks that the fact that it won’t be expending the mega-bucks that its large-cap peers are shelling out may end up being an advantage.
“I believe Apple will likely be a major AI beneficiary without having to invest the same extraordinary sums that software and cloud providers do to remain relevant and ultimately compete with each other,” concludes Sparks. (To watch Daniel Sparks’ track record, click here)
While it’s not unanimous, Wall Street thinks that AAPL remains a good proposition going forward. With 14 Buys, 9 Holds, and 1 Sell, AAPL carries a Moderate Buy consensus rating. Its 12-month average price target of $304.40 points to gains of 20%. (See AAPL stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.