After dramatic sell-offs in 2022, many stocks are on the rise this year. Easing inflation pressures and enthusiasm about some technological advances put Wall Street in a bullish mood again. While a new bull market isn't official, some analysts are talking like a bull market is already underway. With this market sentiment so upbeat, now might be an excellent time to find some worthy growth stock candidates that stand to benefit from the broader market enthusiasm.
One attractive option right now is Apple (AAPL -0.65%). It has nearly unrivaled dominance in consumer tech and a history of consistent stock growth. Recent expansions by the tech giant into artificial intelligence (AI) and virtual and augmented reality (VR/AR) suggest new growth opportunities for this company to explore over the long term.
Considering what Apple has going for it, now might be the right time to grab some (or more) of the stock before it climbs even higher. Here's why.
Apple is quietly joining in on the AI hype
The debut of OpenAI's ChatGPT in November 2022 kicked off a boom in the interest in AI, causing many of the world's most valuable companies to pivot their businesses to further develop the technology. Companies like Microsoft and Amazon saw plenty of new investor support when they revealed their expansion plans in AI, but Apple has been comparatively quiet about its AI efforts amid the hype.
The consumer tech specialist instead focused on using AI to improve user experience in its various products. At Apple's Worldwide Developer Conference in June, the company announced an update to the iPhone's autocorrect, which uses language models similar to ChatGPT to learn how users text. Meanwhile, the AirPods Pro will receive an AI-enabled feature that automatically turns off noise cancellation when the user begins a conversation.
Still, the interest in doing more with AI is definitely there as evidenced by a recent Bloomberg report that indicated Apple could be developing its own version of ChatGPT and potentially taking on OpenAI and Microsoft in the sector. The company has reportedly created a framework for producing language models and developed a chatbot, which engineers call Apple GPT.
With leading market shares in smartphones, tablets, smartwatches, and headphones, Apple has multiple ways to get its AI technology into the hands of consumers. That means it has massive potential in the $137 billion market that is projected to expand at a compound annual growth rate (CAGR) of 37% through 2030.
Reigniting enthusiasm for virtual/augmented reality
A device that could heavily benefit from Apple's AI expansion is its VR/AR headset, the Vision Pro, unveiled in June and expected to be available for sale in early 2024. After years of tech giants like Sony and Meta Platforms struggling to convince consumers to adopt virtual reality, Apple has breathed new life into the market.
VR/AR start-ups that previously found it challenging to find funding are attracting new investors. According to data from Pitchbook, AR, VR, and mixed-reality companies in the U.S. raised about $208 million in June. The figure is almost as much as these companies saw in the last three months combined, marking a 12-month high.
Apple's Vision Pro will launch with a $3,499 price tag, locking out some consumers who will not be able to afford it. Still, the company's pricing strategy with its past products suggests the cost will likely come down with future generations. If this is the case, Apple could soar to the top of the $227 billion industry and substantially profit from the industry's projected CAGR of 45% through 2029.
While other companies currently hold dominating market shares in the VR/AR market, Apple has a long history of outperforming competitors in consumer tech. The company has become the leading name in nearly all of its product categories despite not being the first to the markets.
Data by YCharts
While past performance is no guarantee of future success, successful companies do tend to remain successful for long periods. Apple shares have soared nearly 300% in the past five years, significantly more than any of the five biggest names in tech. The company has a reputation for offering investors reliable growth. Add in the potential of AI and VR/AR that the company has yet to exploit and Apple's stock becomes a must-buy.
