The $3,499 Vision Pro headset offers both augmented- and virtual-reality capabilities, hand-based gesture controls, and advanced eye tracking. The device is set to be released in early 2024, according to Apple.
Few expect the Vision Pro to become a mass market device in its first few years given the higher-than-expected price point, but Wall Street estimates are still far apart on their sales expectations.
Bank of America expects Apple to sell 1.5 million units of the Vision Pro in its first year, while Wedbush expects first-year sales of only 150,000 units. Those ranges imply that the Vision Pro will generate between $525 million and $5.2 billion in revenue next year. Apple stock has sold off 3% since Monday afternoon’s Vision Pro announcement.
Here’s what four Wall Street analysts had to say about Apple’s new device.
Wedbush: “A revolutionary product.”
Rating: Outperform — Price Target: $205
“This marks a new era for Apple being the first new product line in almost a decade and the first 3-D interface for the company that has many use cases and apps within the Cupertino ecosystem that should distinguish the Vision Pro from the competition such as the Meta Quest. Given the high price points, we believe initial shipments are expected to be roughly 150,000 units for Year 1 and roughly a 1 million units in Year 2 at lower price points,” Wedbush analyst Dan Ives said.
Bank of America: “Adoption will take time.”
Rating: Neutral — Price Target: $190
“The price tag of $3,499 was higher than the $3K broadly speculated. While we believe MR has the potential to drive Services revenues higher via a new set of premium Apps the adoption will take time… In our prior analysis we had estimated 1.5 million units to be sold in the first full year, and the launch today did not change our view. We continue to expect at least some subsequent versions of Vision Pro to be priced lower in order to appeal to a larger customer set,” Bank of America’s Wasmi Mohan said.
JPMorgan: “Potential catalyst for AR/VR market.”
Rating: Overweight — Price Target: $190
“While Vision Pro might not drive significant volumes given its premium price point, it could be the potential catalyst for the the AR/VR market as Apple has proven in the past that consumer engagement can deliver willingness to pay premium pricing and Apple’s focus is clearly to hit a home-run on consumer engagement as opposed to volumes with the first device in what admittedly will be a multi-year journey for the platform,” JPMorgan’s Samik Chatterjee said.
Big-name investors are going all-in on AI
Some of the best-known names in investing are betting big on artificial intelligence stocks.
Bill Ackman recently revealed a $1 billion bet on Google parent Alphabet, while Stanley Druckenmiller pumped a combined $430 million into Microsoft and Nvidia.
Tiger Global founder Chase Coleman, billionaire trader Paul Tudor Jones, and Ark Invest CIO Cathie Wood are all bullish on AI.
Some of the biggest names in investing are piling into artificial intelligence, the theme that has taken markets by storm in 2023.
Billionaire investors including Bill Ackman, Stanley Druckenmiller and David Tepper are betting big on firms at the forefront of the AI race – such as Microsoft, Alphabet and chipmaker Nvidia.
Here’s how seven top players are responding to the AI trend:
1. Bill Ackman
Ackman’s hedge fund revealed Monday that it had plowed over $1 billion into Alphabet in a quarter where the tech giant significantly ramped up its AI efforts.
Pershing Square Capital Management snapped up more than 10 million shares in Google’s parent company – buying about 2.2 million Class A shares and 8.1 million Class C shares, according to a Securities and Exchange Commission filing.
Hedge fund billionaire Coleman said last month that mega-cap stocks like Amazon now look like a good bet again after a brutal 2022, thanks to the rise of AI.
The Tiger Global founder told investors to buy the so-called FAANG stocks – shorthand for Facebook parent Meta, Apple, Amazon, Netflix, and Alphabet – and cited Amazon sellers’ use of ChatGPT to write product listings as an example of how AI was already boosting Big Tech.
3. Stanley Druckenmiller
Druckenmiller loaded up on Nvidia shares and made a new investment in Microsoft last quarter, snapping up two of the best-performing stocks of 2023.
The billionaire investor’s Duquesne Family Office bought a $220 million stake in Nvidia and upped its Microsoft position by $210 million, according to its latest 13F filing, released Monday.
Nvidia, the world’s No. 1 producer of graphics chips needed for high-intensity AI computing, has seen its share price double this year. Microsoft, which was an early investor in OpenAI and has integrated ChatGPT technology into its search engine Bing, is up 30%.
4. Paul Tudor Jones
Large language AI models like ChatGPT will have a massive impact on both the economy and the stock market, according to billionaire investor Jones.
He said Monday that the tool had completely shifted his outlook on both inflation and equities – and he’s now bracing for an AI-fueled “productivity boom” that drags down soaring prices and pushes up stock valuations.
“The introduction of large language models [and] artificial intelligence is going to create a productivity boom that we’ve only seen a few times in the last 75 years,” Jones told CNBC.
5. Morgan Stanley
It’s not just individual investors who are caught up in the AI fanfare.
In a research note last month, Morgan Stanley said that 2023 would be a breakthrough year for the technology, which it believes represents a $6 trillion investment opportunity.
“We see AI accelerating digital transformation and tech diffusion across the economy,” internet analyst Brian Nowak said in the note.
6. David Tepper
Like Ackman and Druckenmiller, the owner of the NFL’s Carolina Panthers made some big bets on AI over the past quarter.
Tepper’s family office Appaloosa Management bought 150,000 Nvidia shares worth around $42 million and 500,000 shares in Cathie Wood’s ARK Innovation ETF, which specializes in investing in disruptive tech.
Wood’s fund plunged last year but is up just under 24% in 2023 thanks to tech stocks’ massive rebound.
7. Cathie Wood
The Ark Invest CIO has never been one to miss out on a disruptive technological trend – and she’s been heralding AI’s potential long before ChatGPT’s explosion in popularity earlier this year.
“We’re encouraged by the long-term growth contributions from the headset and Vision Pro app ecosystem, but expect near-term financial contributions to be limited as (1) the relatively high retail price point may limit near-term adoption; (2) previous media reports suggest the headset may be sold at breakeven; and (3) a relatively smaller installed base limits contributions from additional services revenue,” Goldman Sachs’ Michael Ng said.