5/29/24
Apple AI? Things To Look Out For During This Year's WWDC and Its Impact on Apple’s Stock Price
Author: Aarav Bhamre
Editor(s): David Sun
As other companies gear up to launch newer versions of their AI models, Apple seems to be falling behind on the AI hype train. Apple has a lot to show at this year’s Worldwide Developers Conference (WWDC), and if they can’t prove to investors that they are taking big leaps in innovation, it will hurt their stock price and incite more record breaking stock buybacks. We can expect some things based on previous AI models and what Apple might do to benefit their user base.
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Apple is likely to introduce new AI features to Siri, their digital assistant. These would enable Siri to hold longer interactions as well as have finer tuned responses. Siri would also be able to handle more complex and provide more relevant information and conversational responses that benefit the user more than it does now. These features might also include improved Siri suggestions that use AI to offer more personalized recommendations.
Apple might also introduce its own large-language model (LLM). A LLM is a program that can recognize and generate text, among other tasks. They are trained on huge sets of data, hence the name "large.” By creating an LLM, Apple would be able to directly compete with OpenAI’s ChatGPT and Google’s Gemini, although it would be newer compared to these AI models. Apple also has an opportunity to collaborate with one of these companies and integrate AI technology into their devices. Doing this would allow Apple to add more advanced AI programs into their devices and give device users a similar experience to ChatGPT or Gemini. It would also remove a phase where Apple’s own AI model would be very basic compared to the rest.
What does all of this mean for Apple stock? Recently, the company’s earnings have been on the decline, with a negative 4% growth in revenue last quarter. Apple has been reliant on stock buybacks to compensate for their large losses. At the beginning of this month, Apple announced a $110 billion stock buyback authorization. It marks the largest share buyback in U.S. history. Apple is doing this because there is a lack of innovation in its product lines, causing consumers to stray away from buying their goods. If Apple can’t show investors and the public that they have new and innovative ideas in this year's WWDC, there may be massive repercussions to its stock price and more record breaking buybacks.