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Can Apple’s iPhone Event Push the Stock Higher This Time?

The anticipation is palpable as Apple enthusiasts gear up for the annual iPhone launch event. This year’s showcase, aptly titled “It’s Glowtime,” will be streamed online on September 9th, offering a glimpse into the latest smartphone innovations. While consumers eagerly await details about new colors and camera enhancements, the financial world is focused on a different narrative: Apple’s strategic embrace of generative artificial intelligence.

Historically, the iPhone event hasn’t always translated into immediate stock gains. Data reveals an average 0.3% dip on the day of the announcement since the first iPhone’s debut in 2007. However, a closer look paints a more nuanced picture. The stock tends to rebound and climb an average of 2.2% between the announcement and release dates, with further gains of around 12% six months post-release.

This year, industry analysts believe the dynamics could shift. Some speculate that Apple might break the mold by showcasing compelling demonstrations of its AI capabilities, potentially integrated with third-party applications. Such a move, coupled with possible price adjustments, could trigger a more favorable market response than in previous years.

The timing of the event is also noteworthy. September has historically been a challenging month for the market, and Apple’s stock has not been immune, experiencing a 2.7% decline this month alone. Nevertheless, the company’s shares have demonstrated resilience, boasting a 16% year-to-date increase.

The narrative surrounding Apple’s stock has undergone a transformation this year. The first half was marked by a degree of investor uncertainty as the company remained tight-lipped about its AI endeavors. However, the tide turned during the Worldwide Developers Conference in June when Apple unveiled plans to infuse generative AI into its ecosystem.

This revelation piqued investor interest, and they now eagerly await further insights into how AI enhancements will be integrated into the new iPhones, the timeline for these integrations, and what other AI-powered innovations Apple has in store.

The prevailing sentiment among Wall Street analysts is that these AI updates could potentially spark a “super upgrade cycle.” The reasoning is that these advanced features may not be compatible with older iPhone models, compelling users to purchase newer devices to access the latest technology.

Such a scenario would be a welcome development for Apple, as iPhone revenue has experienced a decline in recent years. The anticipated surge in sales in 2025, driven by the AI upgrade cycle, holds immense significance for the company, given that iPhone sales constitute a major portion of its total revenue.

In addition to AI-related announcements, Apple is also expected to unveil details about its upcoming iPhone 16. Industry rumors suggest that the higher-end Pro models will boast larger screens, faster processing chips, and improved camera capabilities compared to their predecessors. Announcements regarding new AirPods and an updated Apple Watch are also possibilities.

While the iPhone event on Monday might follow the historical pattern of a “sell the news” event, the potential for groundbreaking AI advancements could disrupt this trend. If investors are sufficiently enthused about Apple’s AI strategy, the company’s stock might just break free from its past trajectory.

In conclusion, the upcoming iPhone event represents a pivotal moment for Apple. While historical trends suggest a degree of caution, the company’s foray into generative AI could serve as a catalyst for stock growth. The market’s response will undoubtedly hinge on the specifics of Apple’s AI announcements, the perceived potential for a super upgrade cycle, and the overall investor sentiment surrounding the company’s future prospects. As the event unfolds, the financial world will be watching intently, eager to see if Apple can defy expectations and chart a new course for its stock.