Apple Inc. AAPL has been identified as a major player in the artificial intelligence market by renowned investor Steve Eisman of “The Big Short” fame. He believes that Apple’s AI strategy will lead to substantial gains.
What Happened: Eisman, who now serves as a senior portfolio manager at Neuberger Berman, expressed his views on Apple’s AI potential during a recent CNBC “Fast Money” segment.
"I think Apple is actually the hidden AI play," Eisman said.
He highlighted Apple’s AI strategy as a key factor that could drive significant growth for the company, just a day before NVIDIA Corp‘s NVDA fiscal first-quarter results were due.
Eisman, known for his successful bet against the housing market before the 2008 financial crisis, sees Apple as a major beneficiary of the AI boom. He mentioned Nvidia, Advanced Micro Devices AMD, and cloud companies with extensive databases as the most obvious AI investment opportunities.
However, he believes that Apple, often overlooked in AI discussions, could be the biggest beneficiary when AI-driven apps become mainstream.
He pointed out that Apple’s entire product line could see a significant refresh once AI-driven apps become available. This could lead to a surge in demand for Apple’s devices, including iPhones, iPads, and laptops.
"When the apps show up the biggest probably beneficiary is going to be Apple because they're going to have a refresh of literally everything that they sell," Eisman said.
Eisman also emphasized the need for patience, as the development of AI-driven apps will take time, but once they are available, a significant refresh cycle is expected.
Why It Matters: Apple’s AI strategy has been a topic of interest in recent discussions. Analysts have highlighted the potential for AI advancements to drive higher institutional ownership of Apple’s iPhone, with a 23.5% upside.
This comes on the heels of Apple’s unveiling of a new AI model that outperformed OpenAI’s GPT-4, despite being lighter and faster.
However, Apple is also facing challenges in the AI space, with competitors such as OpenAI and Alphabet Inc. GOOGL GOOG continuing to make strides.
Apple’s AI strategy is seen as a key factor in its potential “renaissance of growth,” with a potential partnership with OpenAI being highlighted as a crucial event for the company. The upcoming WWDC is expected to be a key moment for Apple, with its AI reveal being touted as the most important event for the company in the last decade.
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