The shares of iPhone maker Apple are already 22.19% up-year-to-date. However, billionaire Daniel Loeb, founder of hedge fund Third Point, believes the stock has yet to reach its peak and has plenty of room to grow.
In a letter sent to investors earlier this week, Loeb expressed his optimism about the upside of Apple’s stock due to the company’s upcoming artificial intelligence (AI) offerings.
“Despite the stock’s recent strong appreciation, we see room for significant upside ahead as the magnitude of this new AI opportunity surprises,” Loeb wrote, while adding that Apple is in the top five winners in Third Point’s portfolio for the past quarter.
Apple is gearing up for the rollout of its Apple Intelligence, a set of AI-powered upgrades that will include ChaGPT integration, improvements to virtual assistant Siri, an integrated writing tool, notification prioritization, and much more. Apple Intelligence will only be supported by the iPhone 15 Pro Max, iPhone 15 Pro, and upcoming iPhone 16 models.
According to Loeb, the lack of backward compatibility is expected to prompt owners of older models to upgrade, driving up the demand for new Apple products. Additionally, its App Store will become the primary source of AI apps focused on consumers, giving a further boost to the company’s earnings and revenue “over the next few years.”