Apple to Surpass Nvidia as Top AI Stock in 2025, Says Citi

Apple is poised to overtake Nvidia as the leading AI stock by 2025, according to a new report from Citi. The bank predicts that the AI trade, which has been dominated by infrastructure such as chips and servers, is now shifting towards devices—a transition expected to benefit Apple’s upcoming iPhone 16 cycle.

Citi analyst Atif Malik highlighted that Apple’s AI advancements, particularly in its upcoming iPhone releases, position the company to lead this new phase. The iPhone 16, set to be unveiled on September 9 at an event titled “It’s Glowtime,” will feature A18 chips with enhanced neural engines, improved cameras, and on-device AI capabilities under the banner of “Apple Intelligence.”

“Developer feedback on iOS18 beta AI features, including a new photo tool to remove unwanted objects, suggests that AI will be a compelling reason for consumers to upgrade to the iPhone 16,” Malik noted.

“Apple is set to overtake Nvidia as the leading AI stock by 2025, driven by the shift of AI technologies from infrastructure to on-device capabilities, which will be a key win for Apple’s upcoming iPhone 16 product cycle.” — Atif Malik, Citi Analyst.

The bank also predicts that Apple will further solidify its lead with the iPhone 17, expected to launch in 2025. Malik estimates that Apple will sell 85 million iPhone 16 units in 2024 and 92 million iPhone 17 units in 2025, with total iPhone sales reaching 228 million units in 2024 and 241 million in 2025.

Malik rates Apple as a “Buy” with a price target of $255, representing a potential 13% increase from its current value. As AI moves from infrastructure to on-device applications, Citi believes Apple is in the best position to capitalize on this shift due to its strong market presence and seamless integration of hardware and software.

In a related development, reports indicate that Apple is in talks to invest in OpenAI, the creator of ChatGPT, which would further enhance its AI capabilities and market position. This investment, if confirmed, would coincide with Apple’s broader AI strategy, aligning with the expected launch of AI-optimized iPhones.