Apple (NASDAQ: AAPL) climbed 3.8% on Wednesday, September 2, in what was one of its strongest sessions in weeks.

The surge brought the stock just 9% away its their all-time high, largely driven by reports that the tech giant is working on its own artificial intelligence (AI) search tool next year. 

Currently known as World Knowledge Answers, the new solution is designed to rival ChatGPT while serving as the foundation for a broader overhaul of Apple’s voice assistant strategy.

Losing no time, the market was quick to react to the new numbers, with MoffettNathanson upgrading their rating from “Sell” to “Neutral,” with a $225 target, citing fading headwinds as the main cause for optimism.

As of now, the average AAPL stock price rating is “Moderate Buy,” while the average target price for the next 12 months sits at $239,36, implying a modest upside of 0.74% based on 29 ratings on the market analytics platform TipRanks.

Apple gets an upgrade, but risks still remain

Apple reportedly plans to integrate the new AI tool into Safari, Spotlight, and Siri, signaling its intent to reduce reliance on third-party solutions (Siri currently relies on OpenAI’s technology through Apple Intelligence).

This appears to be a trend. Microsoft (NASDAQ: MSFT), for instance, has embedded its Copilot AI across Windows and Office, while Alphabet (NASDAQ: GOOGL) has expanded its Gemini ecosystem. 

MoffettNathanson also pointed out that discounts in China helped Apple maintain share against Huawei, while tariff exemptions have largely neutralized potential cost pressures, as reported by TipRanks. 

Another boost came from the recent ruling that preserved Apple’s revenue-sharing deal with Google, which accounts for around a fifth of Apple’s operating profit.

However, Apple’s stock isn’t cheap, and MoffettNathanson highlighted that it’s trading at more than 30 times next year’s earnings, so some risk still lingers.

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