2024 has proven challenging for Apple’s (NASDAQ: AAPL) stock as the tech giant grapples with obstacles amid predictions of weakened demand for the company’s devices.
For instance, anticipating a decline in iPhone demand, Barclays downgraded Apple’s stock to $160.
In recent weeks Apple stock has sustained a continuous drop, failing to maintain the momentum from the late January rally that fell short of reaching the $200 mark.
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AAPL share price has experienced a 2.27% decline in 2024, with the stock trading at $181.42 by press time.
Apple new product line
Notably, Apple is undergoing significant changes to its product line amid the stock struggle. For instance, despite unveiling its major product in nine years, the Apple Vision Pro, the stock continues to trade in the red zone.
Apart from the Vision Pro, another potential product that could have boosted Apple’s standing is the electric car project. Reports suggest the company will redirect its efforts to other areas away from the decade-long EV project, a move that has conceded with most manufacturers reporting disappointing results.
Additionally, Apple faced challenges in its fourth-quarter results, particularly in its China business where the company is encountering new competition from rivals like Samsung in the smartphone market.
Greater China sales declined 13% from the previous year, totaling $20.8 billion. Despite this, Apple posted a 2% increase in overall revenue for the quarter, reaching $119.6 billion and breaking a four-quarter streak of revenue declines. However, these results have failed to spur a rally in AAPL.
Will AI impact Apple stock?
Having abandoned its electric car project, Apple has shifted its focus towards the burgeoning field of artificial intelligence (AI). Notably, Apple has been publicly absent from the generative AI surge in the past year since the introduction of ChatGPT by OpenAI.
The company has not unveiled noteworthy AI technology despite the heightened popularity in contrast to its major competitors Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Samsung. These firms have presented various advancements in generative AI technology, challenging OpenAI’s ChatGPT.
It’s worth noting that companies venturing into AI have experienced a significant surge in their stock prices, with Nvidia standing out as a notable beneficiary, achieving a coveted $1 trillion market capitalization. Microsoft, too, surpassed Apple as the world’s most valuable company in market capitalization, partly due to its foray into the AI landscape.
While the exact nature of Apple’s venture into AI remains unclear, reports suggest the company has been internally involved in developing large language model applications and AI chatbots. There are indications that Apple is working on its own AI chatbot, internally called Apple GPT, running on a proprietary foundational model.
The impact of Apple’s foray into the AI space on its stock could be shaped by the success stories of other companies that witnessed surges in their equities after advancements in AI technology. This could potentially lay the groundwork for a stock rally, with a target of reaching $200.
Wall Street sets AAPL price
Meanwhile, analysts at TipRanks on Wall Street anticipate the stock reaching $200 within the next 12 months.
Noteworthy is the insight from 25 analysts who, based on the stock’s performance over the last three months, project an average price of $206.15 in the coming year, reflecting a growth of 13% from the current AAPL valuation.
These analysts also provide a high forecast of $250 and a low forecast of $158.
In conclusion, while venturing into AI does not guarantee a stock rally for Apple, Apple must bolster its other key fundamental products and navigate competition to ensure sustained growth.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
