Should You Buy Apple Before This Key June 10 Event?
While many technology stocks have surged in recent times, Apple (NASDAQ: AAPL) has remained on the sidelines, with the shares little changed year to date. The smartphone giant has missed out on the gains as investors favor companies that have been more aggressive -- or more vocal -- about their artificial intelligence (AI) programs. While companies from Meta Platforms to Amazon have offered details of their AI investments, launched AI products, and even discussed monetization of the technology, Apple has pretty much remained hush-hush about its AI plans.
But that may not be the case for long. The company's Worldwide Developers Conference is set for June 10 through 14, and in Apple's most-recent earnings call, Chief Executive Officer Tim Cook said Apple is "very bullish" about the generative AI opportunity -- and Cook says he's "looking forward to sharing some very exciting things with our customers soon."
All of this suggests Apple may make key announcements at the conference, ones that could outline its future role in the high-growth market of AI. Should you buy Apple shares before this big moment? Let's find out.
Image source: Getty Images.
What to expect at Apple's Worldwide Developers Conference
First, let's talk about what we may expect during this year's developers conference. It's pretty much a given that Apple will announce software updates, as this has been the routine throughout the history of the annual event. This means the launch of operating-system upgrades for the iPhone, iPad, Mac, and other Apple products.
The operating system that's getting the most attention, though, is the next one for iPhone, iOS 18 -- with many Apple fans and followers predicting the iOS update may be the most significant one yet. We don't know for sure what features Apple will announce, but AI likely will play a major role.
For example, Apple's digital assistant, Siri, is expected to be given a big AI boost, according to Macworld. Siri would become more conversational and helpful for daily tasks. And Apple might make many AI functions happen on device rather than in the cloud in order to maximize security. Macworld also spoke of reports of Apple talking to Alphabet and OpenAI about including their technologies in the latest iOS. The Information reported this past week that Apple and OpenAI actually have cemented a deal.
Most importantly, though, the upcoming iOS update could offer Apple a boost to near-term and long-term revenue. It may help revenue as early as this year because users with iPhones that are a few years old may have to upgrade to a new phone in order to benefit from all of the iOS 18 features. And the iOS 18 should set Apple on the path to long-term revenue growth because it starts laying the groundwork for a new type of phone, one that incorporates a significant amount of AI.
Could Apple's announcements boost the stock?
Could Apple's announcements at the conference also kick-start stock performance? It's possible. Apple has a solid track record of earnings growth over time, but it's become a mature tech company -- and some investors have turned to other players for a better shot at growth. But if Apple announces a compelling entry into the AI space, the company could win back some of these growth-seeking investors right away and as this new Apple AI story develops.
Now let's get back to our question: Does this mean you should buy Apple stock ahead of the June 10 conference? Yes, it's an absolutely great time to get in on the Apple story.
The company sells market-leading products that have kept customers coming back over time. This is Apple's moat, or competitive advantage, and it's proven its strength. At the same time, these products help Apple generate recurrent revenue as users sign up for services such as digital content or cloud storage. Finally, a big step into AI should offer Apple a new source of growth.
Apple's bargain valuation
To make the deal even sweeter, Apple shares trade for only 29 times forward-earnings estimates right now, a steal considering the company's past performance and future potential.
But all of this doesn't mean you should buy Apple only for a potential stock-price gain around June 10. After all, it's possible that, even if Apple announces a game-changing update, the stock may not immediately take off. And that's OK.
What's most important is that Apple's update actually results in earnings growth over the long run -- and there's reason to be positive about that as well as long-term stock performance.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.
