Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Trader Strategy
Market Specialist
Summary: Apple Inc (NASDAQ:AAPL) has been on an impressive upward trajectory since the Worldwide Developers Conference (WWDC) in June. This bullish momentum is driven by the company’s long-awaited AI initiatives showcased at the event, which have the potential to boost Apple’s revenue growth and innovation. With shares climbing over 18% year-to-date, analysts are increasingly optimistic, raising their price targets. Apple closed at an all-time high of $227.82 on Monday.
What is going on with Apple?
At the WWDC in early June, Apple introduced its AI strategy, Apple Intelligence that integrates generative AI with personal context to deliver transformative user experiences with a focus on privacy. The company also announced a collaboration with OpenAI to incorporate ChatGPT’s capabilities into iOS, iPadOS, macOS, and Siri. As Apple Intelligence becomes more integral to Apple’s products, it could encourage quicker iPhone upgrades if new AI features are limited to the iPhone 15 Pro or the upcoming iPhone 16 series. This would result in strong demand and significant revenue growth for iPhones.
At the same time, Apple is developing the next generation of its Vision Pro headset, with different design and price changes. The company is reportedly set to secure an observer role on the board of ChatGPT-parent OpenAI, similar to Microsoft’s position and is in “active negotiations” with Alphabet Inc. to integrate Google’s AI tool Gemini into the iPhone’s new AI features. The market is beginning to recognize the transformative potential of Apple Intelligence in the second half of the year.
What can you consider if you are long Apple?
Investors who have a long-term stake in Apple and wish to earn some income while waiting for Apple to reach their desired target price may consider selling call options on Apple. This strategy allows investors to earn additional income from being long Apple.
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Advantages of covered calls
Risks of trading covered calls
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