Wedbush analyst Dan Ives has predicted that Apple Inc. AAPL and Microsoft Corp. MSFT could cross the $4 trillion valuation mark over the next year, driven by AI.
What Happened: Ives raised his price target for Apple to $275, representing a 47% increase from its current value. He described the WWDC event on June 10 as Apple’s “most important event in a decade,” anticipating a series of AI announcements.
“Introducing AI to its all-important developer community and laying the foundation for bringing generative AI to the consumer starts with Apple in our view,” Ives said.
These features, likely to be integrated into the iPhone 16 launch in September, could spark a “renaissance of growth” as more users upgrade their iPhones. Ives predicts an iPhone upgrade cycle of over 270 million units.
"We believe the Apple iPhone AI Moment is now here for Cook and Cupertino."
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He also cited positive supply chain channel checks in Taiwan, indicating that Apple sales in April are tracking about 2% ahead of consensus. This further supports his belief that the upcoming iPhone 16 upgrade cycle will exceed current Street numbers for FY25.
Ives is bullish not just about Apple, he thinks even Microsoft's shares could surge by over 25% over the next year, helping its market capitalization cross the $4 trillion mark.
"We believe a year from now the $4 trillion club will include both Microsoft and Apple with the AI 1995 Moment here."
Why It Matters: Ives’ prediction aligns with his previous statements about Apple’s potential in the AI space. In April, he described WWDC as a “key moment” for Apple’s AI future, citing the company’s “best-installed base in the world” for AI. This latest forecast suggests that Apple is well-positioned to leverage its AI capabilities for significant growth in the coming years.
Meanwhile, Apple’s potential AI-driven “supercycle” contrasts with Microsoft’s AI advancements in the hardware space.
Microsoft recently touted its AI-capable Surface notebooks as 58% faster than the M3 MacBook Air, emphasizing its superior AI capabilities. The competition between these tech giants in the AI arena is likely to intensify in the coming years.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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