JPM - “Apple best positioned in Edge AI”

Analysts at JPMorgan believe Apple is in a strong position in the Edge AI hardware market because of its sizable iPhone user base and potential for greater earnings than rivals.

The investment bank highlights a move away from "Revenue TAM" and towards "Profit TAM [Total Addressable Market]" in its analysis, indicating an emphasis on Apple's capacity to convert revenues into significant profits.

Among the iPhone installed base, they continue to see the potential for growth from a less macro sensitive consumer base.

Apple is seen to be in a better position than other phone manufacturers to benefit more from an upgrade cycle because of its devoted user base and premium pricing approach.

JPMorgan warns against getting ahead of reality, even as investor optimism is strong for Edge AI beneficiaries rebounding from recent market slowdowns. "Shares of Edge AI companies like Teradyne and Qualcomm trade at relatively expensive multiples," they write.

On the other hand, they think Apple's stock price is more appealing. Based on their research, Apple is currently trading at the upper end of its historical range. According to JPMorgan, this, together with the possibility of a significant upgrade cycle fueled by AI capabilities, makes Apple the "best pick" among Edge AI-related firms.

(Sources: investing.com, reuters.com)