Apple Analyst Says Rumors Of In-House AI Chip 'Another Breadcrumb' Ahead Of WWDC: 'Cupertino Ready To Play Chess...While Others Playing Checkers'

Zinger Key Points
  • Apple is much further down the path of its own proprietary AI LLMs and technology than the Street expects, analyst says.

Apple, Inc. AAPL is developing in-house artificial intelligence chips even as it charts out plans to make a big splash in the AI arena, multiple media reports suggested recently. Against the backdrop, a bullish analyst weighed in on what this could mean for the tech giant.

Another Breadcrumb: “Cupertino [is] ready to play chess on AI..while others [are] playing checkers,” said Wedbush analyst Daniel Ives in a note. Apple’s rumored plan to put some of its most advanced high-end chips in data centers and use them to process its more advanced AI-based services was another breadcrumb, heading into the company’s annual World Wide Developers Conference, the analyst said.

“Apple is not going to be driving 45 MPH in the right lane when it comes to its AI strategy set to be unveiled at WWDC in June and will be riding in the left lane at 80 MPH,” Ives said. The company would be looking to monetize AI on the Services front, with developers the linchpin to this strategy, he said.

See Also: Best Artificial Intelligence Stocks

Why It’s Important: Apple’s intent to use its advanced homegrown chips around AI gives the company more control over its AI plan, the Wedbush analyst said. He expects the company to build out a broader chip ecosystem for its AI strategy.

“In this AI Revolution [Tim] Cook and Apple are much further down the path of its own proprietary AI LLMs and technology than the Street expects in our view and this move is another tipping of the hand heading into what could be the biggest unveil event for Cook and Cupertino in roughly a decade,” Ives said.

What To Expect At WWDC: At the conclave of developers kickstarting on June 10, Apple will likely unveil its “long-awaited” AI strategy to its “golden installed base” and developer community, Ives said. The analyst expects an AI-driven super-cycle, starting with the iPad lineup, launched this week, and continuing through the AI-powered iPhone 16 this fall.

Ives also sees the launch of an AI App Store, which would be the foundational starting point for developers
and AI apps over the coming years. Tapping into the 2.2 billion iOS devices worldwide along with an iPhone 16 model that will break new ground in AI and begin this next supercycle at Apple, he added.

Ives has an Outperform rating and a $250 price target for Apple.

Apple ended Thursday’s session up 1% at $184.57, according to Benzinga Pro data.

Read Next: Apple Will Pursue ‘Aggressive And No Holds Barred Strategy Around AI,’ Says Bullish Analyst: ‘Worst Is In Rearview Mirror’

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