ETFs
Time to bite into Apple ETFs now?
THE Apple AAPL stock, which has been a laggard in the artificial intelligence (AI) race so far, has regained momentum. Apple shares have jumped 14% in the past month, outperforming the Zacks Computer & Technology sector’s 5.8% return. Much of the credit goes to its recently announced AI initiatives.
The iPhone maker announced its highly anticipated generative AI initiative, dubbed “Apple Intelligence,” at its WWDC conference in Cupertino, California, in mid-June. Apple Intelligence is positioned as a distinctive offering that understands users and their data (read: Bet on “Apple Intelligence” with these ETFs).
Updates to iPhone and Mac operating systems will now allow access to ChatGPT thanks to a partnership with developer OpenAI. ChatGPT can also be used to enhance other tools, including text and content generation.
Apple Intelligence will be deeply integrated into all of the company’s hardware and software products, and will be available for the iPhone 15 Pro, iPads, and Macs powered by Apple’s M1 series chips and newer models starting this fall.
Privacy-focused cloud services
Apple has developed a new cloud service called Private Cloud Compute to ensure user privacy. This service uses Apple Silicon with built-in privacy features, determining whether a request can be processed on the device or requires access to the cloud. Apple guarantees that no user information will be stored in the cloud.
Comparison with competitors
Wall Street has long been waiting for Apple’s entry into generative AI, following MicrosoftBing Chatbot (Copilot) powered by MSFT OpenAI and Google(GOOG, GOOGL)’s Bard chatbot, now named Gemini. Meta META has also integrated AI into its platforms through recommendation software and the Meta AI chatbot. Amazon AMZN has also been very present in the AI race.
Broker Rating
Apple currently has an average brokerage recommendation (ABR) of 1.68 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on actual recommendations (Buy, Hold, Sell, etc.) from 30 brokerage firms. The current ABR compares to an ABR of 1.82 a month ago based on 30 recommendations.
Of the 30 recommendations that led to the current ABR, 19 are Strong Buy recommendations and three are Buy recommendations. Strong Buy and Buy account for 63.33% and 10% of all recommendations, respectively. A month ago, Strong Buy accounted for 56.67%, while Buy accounted for 10%.
How to play with ETFs?
Given that there are still uncertainties about the success of Apple’s upcoming AI deployment, it is best to follow the company with the ETF approach. The basket approach minimizes company-specific concentration risks. ETFs heavily focused on Apple include: Selected Technology Sector SPDR Fund XLK, iShares Global Tech Exchange Traded Fund IXN and iShares US Technology ETF I volunteer.
The story continues
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
ETF Technology Select Sector SPDR (XLK): ETF Research Reports
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iShares US Technology ETF (IYW): ETF Research Reports
iShares Global Tech ETF (IXN): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report