Apple (AAPL) stock hits yet another all-time high, bringing its market capitalization to just above $3.6 trillion. D.A. Davidson managing director Gil Luria joins Morning Brief to discuss the tech giant’s growth and what it means for its upcoming iPhone release cycle.
AI integration will be a key component in the newest iPhones as Apple announced a partnership with OpenAI at its Worldwide Developers Conference.
“We haven’t had a major iPhone upgrade cycle since iPhone 12. And now that there is a sense that there’s enough new functionality and uses for the phone that we will have an upgrade cycle, which could last for a year or two. That warrants this excitement around the stock,” Luria says. He believes that new Apple Intelligence features will compel consumers enough to drive a new device upgrade cycle.
As Apple looks to diversify its exposure to global consumer markets, Luria believes India “has a long-term promise,” explaining: “It’s the country that’s creating the most middle-class and upper-middle-class population anywhere around the world by far. It is in that sense the kind of driver that China was for the last 20 or 30 years. And so that’s why it’s a critically important market.” He adds that there are no domestic competitors to Apple in India — like Huawei in China — allowing the tech giant to dominate the market.
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This post was written by Melanie Riehl
Video Transcript
Welcome back to Morning Brief brought to you by Invesco Apple hitting another all time high, bringing its market cap above $3.6 trillion.
Well ahead of the next closest company which is Microsoft, which sits at just over 3.3 trillion.
Now, the tech giant also seeing its India sales jumped 33% in the 12 months through March.
That’s according to the latest results that we have out from Bloomberg as Apple looks to to diversify beyond China.
So what does this all signal ahead for the company’s next iphone release cycle?
We want to bring in Gloria, he’s D A Davidson’s managing director Gil.
It’s great to have you.
So it seems like we have this unrelenting move to the upside here in Apple shares and the narrative surrounding Apple.
Certainly shifting here.
Lots of excitement surrounding that new A I enabled the iphone that we’re expecting to be coming, I guess.
Do you think that a lot of this excitement is it warranted?
It is uh we, we haven’t had a major iphone upgrade cycle since iphone 12.
And now that there is a sense that there’s enough new functionality and uses for the phone that we will have an upgrade cycle which could last for a year or two.
that, that warrants this excitement around the stock.
Um Let’s not forget iphone is half of Apple’s revenue and it really pulls with it.
A lot of other revenue including services revenue, which has been the, the uh ongoing best grower within the business lines.
And so for Apple, what is the signal about some of their other product lines, what what could continue to or what could do well as the company looks to further penetrate the India market.
So India has a a long term promise for Apple, it’s, it’s the country that’s creating the most middle class and upper middle class population anywhere around the world by far.
It is in that sense, the kind of driver that China was for the last 20 or 30 years.
And so that’s why it’s a critically important market now to Apple’s benefit.
It doesn’t have domestic competitors there, unlike China, where now Apple is going head to head with the domestic competitors that are making better and better phones in India.
That’s not the case they really have as dominant a position in the high end of the market as they do in other countries outside of China.
And that means that India will continue to be a long term growth driver across businesses.
For Apple.
What do you think this upside really looks like here for the, for the a so in terms of the the growth rates, uh the the consensus expectations, at least going into the worldwide developer conference was that iphone would grow 5% which was actually not bad considering it hasn’t grown in a couple of years.
We actually think that iphone sales uh this upcoming year could grow 10% because the functionality is gonna be compelling as folks use some of this new functionality during the holidays on their iphone 15 pro and some new users use it on the iphone 16 versions.
It’s gonna be compelling to other people and and other around them and other people have iphone twelves, thirteens phones that are due for an upgrade.
And once they see that this functionality is only available in newer phones, it will compel them to go out and buy a new iphone.
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