Apple will gain more AI functionality over time, says D.A. Davidson’s Gil Luria

Apple (AAPL) - iPhone Sales & AI Integration - Apple is expected to have its best iPhone sales season in four years, driven by an upgrade cycle due to many users having four-year-old phones [2][3] - The primary driver for iPhone upgrades is the age of existing phones, not necessarily AI functionality [3] - The last time Apple experienced double-digit growth in iPhone sales was four years prior, followed by a sales decline the subsequent year [4] - AI will be integrated into the iPhone experience, enhancing features like notifications, email summaries, and photo editing [11][12] - Investors appreciate that Apple's AI integration doesn't require them to determine if Apple is a winner in the AI space, as users will continue to use iPhones [10][12][13] Nvidia (NVDA) - Market Concerns & Growth Potential - There are concerns about Nvidia, including capex scrutiny, restrictions on sales in China, competition from Google TPUs, and investor communication issues like circular deals with Coreweave [6] - Despite concerns, the increasing use of AI necessitates more computing power, which will likely be met by Nvidia chips in data centers for the foreseeable future [7] - Excesses in AI were partly driven by Nvidia's behavior, requiring caution [8] - Nvidia's earnings are expected to grow by 50% to 60%, while Apple's earnings are expected to grow by 10% [9]