Why Nvidia's Stock is Set to Skyrocket with Apple’s AI Integration

as we know Nvidia is the main provider to train AI models and apple just integrated AI into its phones now will be just a matter of time for Nvidia stock to massively explode welcome back to Squawk on the street Apple unveiling a slew of new products at Monday's big product event including a new AI powered iPhone here with their reaction to the announcements we've got wed Bush's Dan Ives who just raised his price Target to 300 from 285 on the stock alongside w Street Journal and CNBC contributor Joanna Stern it's great to have you Joanna you just tried out all four new iPhone models and quote you understand why the AI software is still in beta explain what you mean we need the the full Joanna review well yeah the full Joanna review is that this is still in beta I got to test out a few of the features in the beta software running on these new phones and it there's some good there's definitely some good the writing tools definitely quickly summarize some text Translate a tech note I was writing to my mom to be more professional it's definitely what I want but I tried out this uh image editing tool where you clean up the background where you can edit out someone in the background and it was a a little not the best not the best Apple's recent announcement of integrating Advanced artificial intelligence capabilities into its new iPhone models has created a buzz in the tech industry although the specifics of these AI features remain largely Under Wraps it's clear that this develop Vel ment could have significant implications for NVIDIA a leader in AI Hardware Nvidia has been a Pioneer in developing highperformance Graphics processing units or gpus which are essential for handling the complex computations needed for AI applications these gpus with their ability to process multiple tasks simultaneously are crucial for running the neural networks that drive AI Technologies as Apple continues to enhance its AI features it is expected that these Innovations will demand more powerful Hardware this could lead to a notable increase in demand for nvidia's gpus especially if Apple opts to utilize nvidia's Advanced AI Hardware Solutions potential benefits for NVIDIA include a rise in GPU sales which could lead to higher revenue and profits this surge in sales could also strengthen nvidia's Market position reinforcing its status as a dominant force in the AI Hardware sector and potentially enhancing its leverage with both customers and suppliers we all want to understand what the upgrade cycle is going to be I read your column this morning obviously interested in terms of the buttons and different things that you're going to be able to do but what is your sense having done so many reviews Through The Years in terms of how motivated consumers are going to be to go out there and buy this new fun look Apple used to do their s models right it was an incremental change up from the previous generation they stopped doing that they started going to the the full numbers this is an S model when you look at the hardware changes this is not a significant Hardware bumped this is very important to look at in terms of how important the software is now sure they're not going to have these AI features on day one I think that's actually okay I don't think that many people and I know we're gonna have Dan on here I do not think that many people are running out to buy these phones for AI they are running out to buy these phones because they need to upgrade from an older phone and so when you look at what they're upgrading from if that's a 23 four year phone they're getting significant Hardware improvements they're not running out to get software improvements and they're getting uh significant battery life improvements I know that as well from your uh coverage this morning Dan you heard they're getting battery right yeah they're getting battery they're getting better processor they're getting bigger screens if they were coming from a few Generations they're getting better design but they're they're not running out for AI but Dan you you tell me you tell me what you're thinking no no no I get to do the interviews Joanna this is this not the Wall Street Journal yeah all right Dan you heard Joanna so what do you have to say in terms of at least her belief that consumers are not going to run out there for this AI empowered phone well look I think it's twofold I mean what you talk about in terms of the upgrades 300 million iPhones have not upgraded in four plus years of 1.5 billion iPhones and that's why I'm in Asia today I'm this second trip in the last six weeks everything we're seeing in the supply chain builds have been increasing up 10 million from where it was to begin with so that indicates if if that trajectory Contin and this even before Apple intelligence in terms of everything gets rolled out this will be a historical year for Apple I think this will be their biggest unit year ever and it's just the drum roll to what I view as an AI driven super cycle that now starts to take place what Dan and Sarah what what is a super cycle what does that look like what's the difference between a super cycle and a typical upgrade cycle yeah I mean a super cycle I would view is anything above 230 million units and I think this could be 240 potentially 250 million units from what we're seeing now look Joanna is hits it you know on exactly in terms of the upgrade cycle part of it is the most pin up demand we've ever seen for an upgrade just given how many have not upgrade but when you look at Apple intelligence AI will now I think 20% of consumers around the world they will access AI through copertina and that is ultimately the key to really what's going to be a multi-year up trade cycle iPhone 16 iPhone 17 speaks are $300 price T and I think a year from now this is a $4 trillion Mark Dan what about the the ruling by the European court against Apple this morning do puts a damper on it that I mean the $ 13 billion back taxes I can't even remember how long I've been following this case it's been going on so long and Apple has fought it so hard yeah like almost 8 n years I look they already allocated money for that so I mean they'll just take a charge in the quarter as insane as it sounds it's actually not a big deal I think investors actually expected that probably they'd lose this they're going to continue to have these issues in Brussels in the Beltway but I think investors are going to shrug it off because it all comes down to this the Renaissance of growth is now ahead for apple and I think many of the doubters going back wwc have really been against this story and I think they will continue to prove wrong the AI consumer Revolution begins now in copertino and Joan let me just end with you on that note in terms of you know Apple intelligence when do you think consumers will be motivated to go out and get the phone because of what is being offered in terms of generative AI on that device I think we're looking at at least 6 months uh maybe a year for all of the features Apple showed off in June at wwc to hit the phones and look I think I think they're going to be a lot of nice to haves with with this AI with a lot of the AI tools the writing tools the the camera clean stuff once some of that stuff also kind of gets out there in the social media ecosystem and people can see what you can do I think that's going to be more of a motivation than hey Apple's marketing this with AI and you're going to get those features you know maybe soon moreover if Nvidia sees significant financial gains from this increased demand it could boost investor confidence potentially leading to a rise in nvidia's stock price however several factors could influence the extent of these benefits Nvidia faces stiff competition from other chip makers like AMD and Intel who are also heavily investing in AI Hardware this competitive landscape could impact nvidia's share of the market additionally apple has a track record of developing its own proprietary Hardware if Apple chooses to invest heavily in its own AI chip development it might reduce its dependence on external suppliers such as Nvidia finally the overall success of Apple's AI features will depend on how well they they are received by consumers if the features do not gain traction the anticipated demand for the underlying Hardware could be limited in summary Apple's move to incorporate AI into its new iPhone models presents a promising opportunity for NVIDIA if Nvidia can capitalize on this opportunity effectively it could experience a significant boost in its stock price however the extent of these gains will be influenced by factors such as Market competition Apple's internal developments and consumer acceptance of Apple's AI in ations the US justice department has sent subpoenas to Nvidia and other companies seeking evidence that the chipmaker violated antitrust laws this is according to people familiar with the investigation that our Bloomberg reporters have spoken to we should point out we are still awaiting comment from Nvidia and the doj itself joining us right now is Ian King Bloomberg news reporter covering covering uh the semiconductor space Forest Ian talk to us a little bit about what it means when they see say they're seeking evidence of antitrust violations what exactly are they sort of hinting at right in in this particular case um we've reported a while ago that there was questionnaires going out that they were just sort of asking customers asking competitors you know what was going on in the market the fact that this has gone to the subpoena stage the legally enforcable request for information is usually a sign of of an escalation um in terms of what they might be looking for for things like bundling things like you know taking action perhaps P punitive action against companies that don't use it exclusively that perhaps look at other uh alternative suppliers because as we know Nvidia has a very very tight uh control over the supply chain for a particularly important product at this point