Wedbush: Tomorrow a new AI era for Apple begins at WWDC

Apple (NASDAQ:AAPL) is expected to unveil its highly anticipated AI strategy at its annual Worldwide Developers Conference (WWDC), an event that Wedbush analysts believe could initiate an AI-driven accelerated growth cycle for the iPhone and Services, setting the stage for Apple's narrative in the coming years.

“In our view WWDC represents the most important event for Apple in over a decade as the pressure to bring a generative AI stack of technology for developers and consumers is front and center with Cook&Co. set to make history for Cupertino,” Wedbush analysts said in Sunday note.

“We believe AI technology being introduced into the Apple ecosystem will bring ample monetization opportunities on both the services as well as iPhone/ hardware front” and add $30 to $40 to the company’s growth story.

According to Wedbush, Apple's introduction of AI at WWDC will be pivotal for its developer community and consumer market. They expect the announcement of a flagship partnership with ChatGPT maker OpenAI, featuring an OpenAI Chatbot with exclusive capabilities, leveraging both on-device and cloud-powered Apple LLMs, and Apple's high-end chips.

Moreover, the tech giant is expected to lay the groundwork for an AI App Store, enabling developers to create AI-based consumer apps, which will drive Services growth, which is expected to further monetize Apple's extensive global installed base.

“We also expect iPhone 16 will include exclusive AI features that sets up for a renaissance of growth that will spark a massive overdue upgrade cycle into 2025,” Wedbush wrote.