Research and brokerage firm Rothschild & Co. Redburn predicted that Apple's stock could rise by about 30% to $400 if the company succeeds in forming a strategic partnership with Nvidia to enhance its artificial intelligence capabilities.
The company's analysts believe that Apple's current AI strategy remains below the level of competition, given its limited spending compared to major technology companies, and its AI models lagging behind the latest models available on the market.
Apple currently relies on Alphabet's Gemini models for some of its artificial intelligence services, including the development of the new version of its Siri voice assistant, at an estimated annual cost of $1 billion.
Rothschild & Co. Redburn believes that strengthening the collaboration between Apple and Nvidia could give the iPhone maker a faster path to improving its AI capabilities, by leveraging open-source models developed by Nvidia, rather than bearing huge costs to develop fully advanced models in-house.
This approach could allow Apple to direct a larger portion of its resources towards developing its own chips, while reducing its reliance on competitors like Google in artificial intelligence technologies.
This vision comes at a time when Nvidia is expanding its development of open AI models, giving companies the ability to leverage advanced technologies with greater flexibility and control, which could make a potential collaboration with Apple more attractive to both parties.
However, such a partnership remains a possible scenario and not a declared agreement, and the relationship between the two companies has a history of tensions, which means that turning this vision into actual cooperation may face challenges.
Meanwhile, the launch of the foldable iPhone Ultra represents another factor that could support Apple's stock in the coming period, as Rothschild & Co. Redburn expects the phone to be launched next September and sell about 14 million units during the 2027 fiscal year.
The company estimates the phone's price at around $2,199, making it one of the most expensive iPhone models and potentially contributing to a rise in the average selling price of Apple devices and boosting iPhone revenue. Estimates suggest that the foldable phone could increase the average selling price of iPhones by approximately 11% by June 2027.
Thus, the bullish scenario for Apple's stock is based on two main factors: resetting the company's AI strategy through potential partnerships with Nvidia, along with entering the foldable phone market via the iPhone Ultra, which could give the company new sources of growth and support a revaluation of the stock by investors.
