2024-06-21 06:37:26 ET
Summary
- Apple's data protection combined with its AI models might secure a privilege position for Apple in the long haul.
- Apple is rated as a buy due to potential revenue growth from Apple Intelligence and new upgrades.
- Tim Cook's focus on privacy and security sets Apple apart in the AI development race.
- Apple's partnerships with Google and OpenAI allow for AI development without compromising user data privacy.
I rate Apple (AAPL) as a buy as the company is establishing a potential new cycle in upgrades of its different devices with the new "Apple Intelligence" opening new opportunities for revenue growth in the next few years. Privacy and security are two of the main pillars set by Tim Cook's leadership since he took over as CEO in 2011 and are frequently overlooked by several analysts. As AI becomes more relevant and mostly a commodity on most of our devices, people might be more aware of how tech companies are using their data for their own machine learning and generative AI. I do not know which will be the final outcomes—negatives and positives—of the AI embedded in different aspects of our lives and how those outcomes could impact the global economy, politics, culture, etc. Under these uncertainties, I think that the security and privacy features of Apple will become a coveted factor in the long term, which, by itself, might reinforce even more of its already strong competitive advantages. In my previous article written in February 2024, I've found an intrinsic value of around $212 per share. Now I need to make some adjustments.
Context
The markets were expecting big news about AI at the last WWDC 2024 , and Apple pleased most of these big expectations by launching the new Apple Intelligence, which is another way to name the AI for Apple. This AI offered by Apple is comprised of multiple highly capable generative models that are mostly specialized in the user's everyday tasks while adapting on the fly to their current activity....
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Apple: AI With Privacy And Security, A Unique Combination