Apple stock price closed at an all-time high: Why the surge despite a mixed reaction to its AI event?

It’s been a big week for Apple—and an even bigger week for Apple investors. Yesterday, the company’s stock (ticker AAPL) closed at an all-time high of $207.15 per share, according to data from Yahoo Finance. AAPL shares climbed 7.26% in one day—one of the biggest single-day jumps for the stock in recent memory.

The stock surge propelled Apple to a market valuation of over $3.17 trillion. But just why did AAPL shares have one of their best trading days in a long time yesterday? Here’s what you need to know.

Apple Intelligence 

On Monday, Apple held its annual Worldwide Developers Conference (WWDC). There it showed off its usual software updates—the upcoming versions of iOS 18, iPadOS 18, macOS Sequoia, and watchOS 11, which powers the iPhone, iPad, Mac, and Apple Watch, respectively.

But those software updates were only part of the show. The real draw for watching the keynote this year was hearing about Apple’s AI plans. And Apple didn’t disappoint. It spent the second half of the keynote solely talking about its new Apple Intelligence AI platform—a layer of AI integrated into its iOS 18, iPadOS 18, and macOS Sequoia operating systems.

With the introduction of Apple Intelligence, Apple officially threw its hat into the AI ring alongside other competitors like Google and Microsoft.

Public reception to Apple’s AI

The thing was, Apple’s stock actually fell on Monday after its AI announcement. The reason for this is unclear, but Monday’s stock price drop may have been due to the fact that many Wall Street traders had unrealistic expectations for Apple’s AI announcement.

Some likely expected Apple to introduce a totally new AI technology that the world had never seen before, but instead, Apple’s AI works a lot like other AI systems and platforms: You can use it to help you generate text or images and get answers to questions, for example.

However, saying Apple’s AI is no different than its competitors’ offerings is an oversimplification. Apple Intelligence is different for one big reason: It was built from the ground up to protect user privacy, as the company’s software chief, Craig Federighi, explained to me in an interview.

Apple’s AI also has a big benefit over other AI systems and offerings: It’s integrated into the company’s three most important operating systems, so you can take advantage of its generative capabilities no matter which app you are in—no need to call up a specific app to generate text and another one to generate images.

Still, reception from Apple users and Wall Street was mixed, which didn’t help the stock’s price on Monday. 

So, why did Apple stock hit an all-time high on Tuesday?

If Apple’s stock price dropped after its AI announcement on Monday, why did the stock surge and close at an all-time high yesterday?

It’s a question that has no definitive answer, but one of the reasons the stock probably rose so much on Tuesday is because, after all the media hot takes settled in on Monday, bean counters on Wall Street may have started looking more into the financial potentialities behind Apple’s announcements.

Some estimates say Apple has over 2 billion active devices around the world. Many of those devices aren’t the latest ones. Instead, they are iPhones that may be two or three generations old, and Macs, the majority of which may still have Intel processors.

But the thing about those older iPhones, iPads, and Macs is that many of them will not be able to run the new Apple Intelligence platform that Apple announced on Monday. And so Wall Street is starting to bet that, because of that limitation, Apple’s AI announcement may propel what is referred to as an upgrade “supercycle” this fall when Apple launches the iPhone 16 lineup.

Currently, if you want to use Apple Intelligence on your iPhone when iOS 18 is released this fall, you need to own either an iPhone 15 Pro or an iPhone 15 Pro Max—no other iPhones can run Apple Intelligence.

And if you want to run it on your Mac, you’re out of luck if you still own a Mac with an Intel processor. (You can see a full list of all the Apple devices that support Apple intelligence here.)

In other words, there are hundreds of millions of iPhone owners out there who just got a strong reason to upgrade to the iPhone 16 series this fall—because if they don’t, they won’t be able to take advantage of Apple’s AI.

And that’s got Wall Street seeing dollar signs in its eyes. Traders seem to be buying in now, betting that Apple’s coffers are going to get even fatter later this year when the company will likely have one of the biggest iPhone and Mac upgrade cycles it has seen in years.

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