Apple’s surge to record highs faces a major test next month. What it must do to pass
Apple’s incredible eight-week march to break records faces a big test next month. Like many investors, we want the company to seize the moment and continue the rally. The iPhone maker’s annual Worldwide Developers Conference (WWDC) kicks off on June 8, offering another chance to impress Wall Street with its rather erratic application of artificial intelligence. The event comes during Apple’s year of change, as long-time CEO Tim Cook prepares to hand over the reins in September and a major AI partnership with Alphabet’s Google is launched. The question is: Can Apple finally deliver a truly conversational Siri? Ben Reitzes of Melius Research thinks so too; predicts that the new Siri will be “much better” with the help of Google and Gemini large language models. “We see evidence that Siri could prove to be a mediating interface that could further differentiate the Apple ecosystem and generate a level of excitement among developers not seen since the early days of the App Store,” wrote Reitzes, partner and head of technology research at Melius. “In short, Apple may be on the verge of a true AI boom.” In addition to integrating into Apple platforms, Reitzes and his team envision a world where must-have apps like Uber, Lyft, and DoorDash “will truly integrate into Siri.” If users interact with apps more frequently and developer activity increases, that means more App Store revenue, which will further boost Apple’s high-margin services business. Melius raised his price target on Apple to $385 per share from $355; This represents an increase of almost 25% from Tuesday’s close. Apple has had little success significantly improving Siri since announcing its partnership with OpenAI two years ago to offer ChatGPT as an option for answering more complex queries. After struggling with internal efforts to develop it, Apple decided to pivot in January, announcing an alliance with Google to leverage Gemini. Jim Cramer said on CNBC on Tuesday that he’s noticed some incremental improvements. “I know it sounds like sixth grade, but this thing is heading into high school.” He added: “I’m talking first class when we come to WWDC.” Apple’s rise has taken it above the Club price target of $300, which we will re-evaluate after WWDC. Like Jim and the Reitzes at Melius, Bank of America is optimistic about the new Siri. “If AI assistants become the new front door for search, apps, commerce, scheduling, payments and workflow completion, we think Apple should have meaningful influence over model providers, app developers, merchants, advertisers and payment networks,” BofA analysts wrote. he wrote. They increased their price target on Apple from $330 to $380. But AAPL YTD mountain Apple’s (AAPL) year-to-date performance Wall Street sentiment hasn’t always been so bullish on Apple’s AI roadmap. When the company first unveiled its AI suite called Apple Intelligence at WWDC 2024, investors saw the updates and those that followed as evolutionary rather than revolutionary. The following year at WWDC 2025, Apple again fell short on artificial intelligence. Apple shares, which fell immediately after the events, completed both years with an increase. Last year, despite lacking the “sizzle” of artificial intelligence, as Reitzes calls it, the new iPhone 17 models had enough software and hardware improvements to be a huge success. As Apple enters a new chapter, its long-standing partnership with Alphabet is a win for both companies. Apple is getting Google to beef up its AI features, including its Siri upgrade, for a reported $1 billion. As Jim noted on Tuesday’s Morning Meeting, Google is already paying Apple a lot more to be the default search engine on its devices. Apple also avoids spending the hundreds of billions of dollars that Google has and will spend on artificial intelligence infrastructure. For Alphabet, which Jim also loves, it keeps Google front and center on both iPhones and Android devices. As a result, with less than two weeks until WWDC 2026, the rally in Apple makes it easier for us to maintain our “own, no-trade” definition on the stock. Jim summed it up best in his weekly column: “Apple’s quiet rise is a joy.” The stock is up 25% since the Iran war lows on March 30, finishing Tuesday just below Friday’s record high close of about $309. That turnaround has Apple shares up more than 13% year to date, compared with the S&P 500’s gain of about 10% in the same period. (Jim Cramer’s Charitable Trust is long AAPL, GOOGL. See here for a full list of stocks.) When you subscribe to the CNBC Investment Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. 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