Two analysts expect Apple's stock to rise more than 20%. How will agent-based AI help it?

The move to agent-based artificial intelligence should be a positive for Apple, says Bank of America. Melius Research expects the likely release of the updated Siri voice assistant this year to replace ChatGPT for 2.5 billion users of Apple devices. Both investment banks have raised their price targets on the company's stock, predicting a rise of more than 20%.

In trading on May 26, Apple's quotations reached an intraday record. Since the beginning of the year, its securities have risen by 13.4% and may be ready for a breakthrough - with capitalization growth to $5 trillion, Barron's predicts.

BofA analyst Vamsi Mohan raised the target price of Apple shares from $330 to $380, maintaining a recommendation to buy them, writes CNBC. This target is 23% above the closing level of trading on Ma 26. The analyst explained that with AI agents becoming the new interface for search, shopping and other tasks, Apple will gain significant leverage over AI model providers, app developers and other companies. The reason is that it controls a large amount of user data through its devices.

"Apple's defense moat in agent-based AI is based on Apple and iOS' own chips," Mohan wrote in a note cited by CNBC. - The chips determine how much inferencing (giving out data at the user's request - Oninvest) can happen locally - which is important for response time, privacy, reliability and cost. And the operating system decides whether the AI can access user context, access applications, route requests, confirm identity, ask for confirmation and perform tasks in a trusted way."

While analysts have questioned Apple's AI strategy, believing the company is lagging behind many of its "Magnificent Seven" competitors, Mohan argues that it faces a big opportunity in agent-based AI thanks to an expected upgrade to voice assistant Siri, CNBC writes. BofA estimates that this could bring the company between $15 billion and $30 billion in additional revenue by fiscal 2030.

"In an agent-based world, value goes to the platform that controls user intent, personal context, app access, permissions, identity, authentication, payments, and trust," Mohan wrote. To win, Apple needs to turn Siri into the "manager" of the iPhone, he believes.

Melius analyst Ben Reitzes raised his target on Apple shares to $385 from $345, suggesting a potential upside of 24.6%, and also reiterated a buy recommendation on them, Barron's reports.

"Apple may be on the cusp of a true AI breakthrough," Reitzes wrote. - The world is ready to use voice commands as a computational interface, and Apple may be on the cusp of the moment."

Reitzes believes that the new Siri, which is expected to be a standalone app, could replace ChatGPT for the 2.5 billion device users. He too believes it will be "an agent-based interface that will further differentiate Apple's ecosystem and generate a level of excitement among developers that hasn't been seen since the early years of the App Store." Reitzes predicts that this shift could launch "a huge new product cycle that will support iPhone sales growth." The analyst believes Apple's architecture - with AI models on the device for lighter tasks and a private cloud for heavier computing - makes the company unique.

"No other consumer technology company has both parts of this architecture within a single model, and we believe this gap will become more visible and more valuable as the complexity of agent-based AI grows," he wrote. - Agent-based AI is the structural support factor that will drive consumers to buy the latest and greatest Apple gadgets because they will perform better than other brands' devices."

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