WWDC a ‘pivotal moment’ for Apple with AI plans in focus- Wedbush

Investing.com-- Apple Inc's (NASDAQ:AAPL) Worldwide Developers Conference (WWDC) is set to be a pivotal moment for the iPhone maker, Wedbush analysts wrote in a note, especially with the tech giant widely expected to reveal its plans for artificial intelligence.

The WWDC will kick off from June 10, which Wedbush analysts said they believed will begin an “AI-accelerated growth cycle on the iPhone and services.” 

The brokerage maintained its Outperform rating on the stock and its $275 12-month price target, which indicates an upside of 41% from current levels.

Wedbush said the introduction of AI to Apple’s “golden installed base” of 2.2 billion iOS devices presented more opportunities for monetization on the services and on the device front. 

The Cupertino-based tech giant is also expected to formally announce a tie-up with OpenAI and likely unveil AI models natively powered by its own devices. Wedbush said it also believed Apple will hint at an AI App Store. 

Wedbush said that the AI angle will help Apple see a resurgence in growth, especially with the iPhone 16. The firm is also expected to integrate AI into iOS 18. 

AI is expected to help Apple offset an ongoing slump in hardware sales, particularly of its flagship iPhone. Laggard sales in China, which have now fallen for over a year, have been a key point of contention for the firm.

While Apple clocked better than feared earnings in the first quarter, its sales in China continued to weaken amid some government scrutiny, as well as tough competition from local players such as Huawei and Xiaomi (OTC:XIACF) Corp (HK:1810). Still, the firm's revenue from software services remained relatively robust.

Apple has largely lagged its U.S. tech peers in incorporating AI features into its flagship devices- a trend that analysts say is also behind its latest sales decline.