Wall Street is eagerly anticipating that artificial intelligence will change the current state of consumer electronics weakness and become a secret weapon that brings generous returns to investors.
Bank of America analysts pointed out in a report on Wednesday that smartphones will require stronger computing power to handle the daily use of artificial intelligence applications, which means the best opportunity for smartphone manufacturers to "upgrade" and drive 2.2 billion active smartphone users into the artificial intelligence stage.
The Wamsi Mohan team, a senior stock research analyst at Bank of America, refers to artificial intelligence smartphones as IntelliiPhones and believes that this is a once-in-a-decade upgrade opportunity that will continue for many years, similar to the tiered feature improvements driven by smartphones.
Mohan added that, IntelliiPhone will provide consumers with new experiences that smartphones cannot match, including augmented reality and virtual reality experiences, health monitoring, and more. With the development of artificial intelligence technology, The gap between IntelliiPhones and traditional smartphones will further widen, thereby driving consumer desire for upgrades.
The arrival of the era of artificial intelligence smartphones has also made Bank of America very optimistic about Apple's prospects. Mohan reiterated his buy rating for Apple's stock and a target price of $230 on Wednesday, which means Apple will rise by 20% in the next year.
Apple's turnaround
Over the past year, Apple's stock price has risen by only 7%, lagging behind the performance of the S&P 500 index and far behind some large technology stocks that have surged due to artificial intelligence. But this time is different, and the performance will improve in the future.
Bank of America analysis points out that Apple's valuation will become higher because the iPhone has rich experience in upgrade cycles, ample cash on hand, and huge opportunities to enter the new terminal market. In addition, its constantly increasing service portfolio diversity will help it gain an advantage in the era of artificial intelligence smartphones.
In addition, Bank of America stated that one of the key to the success of artificial intelligence smartphones is the development of artificial intelligence application developers. And it believes that developers will develop a large number of artificial intelligence applications running on Apple phones, thereby creating new profit points for Apple.
CFRA Research analyst Angelo Zino also expressed a similar view, maintaining a buy rating for Apple and stating that Apple's artificial intelligence upgrade will improve the sales prospects of iPhones in China.
He added that Apple plans to enhance its artificial intelligence capabilities before launching the iPhone 16 this autumn, which will attract more Chinese consumers and solidify its position in the high-end smartphone market.