Shares of Apple Inc. gained a lot of ground this week, and that could keep up from here.
If it lasts until the end of the day, the stock’s 7.7% rise so far this week will be the best in the Dow Jones Industrial Average DJIA. This comes at a time when investors have been doubting Apple’s AAPL, -0.82% AI strategy for most of the year. Companies with catchy names, like Nvidia Corp. NVDA, +1.75% and Meta Platforms Inc. META, +0.11%, seemed like better bets on the AI trend because they were already making money from it.
But Apple helped Wall Street see this week that it did, in fact, have a good AI strategy. The new AI features that Apple showed off at its Worldwide Developers Conference keynote on Monday were pretty much what people were expecting. However, Apple said that its new Apple Intelligence service would only be available to owners of the iPhone 15 Pro line. People who buy the new iPhone models in the autumn will probably also be able to use it. That means Apple could use AI to push upgrades for devices at a time when replacement cycles are getting longer.
Analyst Jordan Klein at Mizuho said that more long-only funds and individual investors could pile into Apple if the stock keeps going up. That’s because some hedge funds and concentrated long-only funds don’t seem to trust Apple shares enough.
Klein told his clients in a note, “I would not want to be naked about Apple right now.” He said the stock was like Qualcomm Inc.’s stock QCOM, -1.14%, which has now gained 38% since Thursday’s close, which is twice as much as the tech sector’s gains over the past two months. In the same time period, Apple shares went up 30%, which was more than the SMH 23% rise in the VanEck Semiconductor exchange-traded fund.
For now. Apple will try to keep Nvidia at bay and stay one of the top two U.S. companies by market capitalization before the S&P Technology Select Sector Index rebalances every three months. This will be based on Friday’s results.
When it comes to market value, Apple could end the day ahead of Microsoft Corp. MSFT, +0.22% as the most valuable U.S. company. This means that funds that follow the sector might have to sell Microsoft shares in order to buy Apple shares. If Apple comes in third, though, behind Nvidia, funds may have to sell Apple shares to buy more Nvidia.
