Apple Stock Is Getting A Boost From AI Today: What's Going On?

Apple Inc AAPL shares are trading higher Tuesday following a report suggesting the company is working on AI chips for data centers.

What Happened: Apple has been designing its own chips for iPhones, iPads, Apple Watches and Mac computers over the past decade.

According to a Wall Street Journal report, Apple has also been working on its own chip designed for AI software internally code-named Project ACDC — Apple Chips in Data Center.

The report indicates that Apple has been working closely with Taiwan Semiconductor Manufacturing Company Ltd TSM for design and production of the chips.

People familiar with the matter reportedly told the Wall Street Journal that Project ACDC has been in the works for several years and does not have a set release date. Some of the people also said Apple’s chips are likely to be focused on running AI models instead of training them, an area Nvidia currently dominates.

Many are anticipating AI updates from Apple at its Worldwide Developer Conference in June. On a conference call following earnings last week, Apple CEO Tim Cook said he believes Apple has advantages that will differentiate us in the new era of AI.

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AAPL Stock Forecast In 2030

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For Apple, over the past five years, its annualized stock performance is 30.34%, and if you assume that trend continues for another five years, you can expect a stock to trade at $691.41.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

AAPL Price Action: Apple shares were up 1.58% at $184.58 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Apple.