Why Apple will be the big winner of AI's 2nd wave, according to 'Big Short' investor Steve Eisman
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- Steve Eisman told CNBC that Apple will benefit from the coming wave of AI-based applications.
- The famous investor noted that the iPhone maker will need to offer new hardware to use these apps.
- Prospects of an AI iPhone have spurred bullish calls among other analysts.
Apple is well positioned to exploit the second leg of artificial intelligence, as the technology starts to take the form of mobile applications, Steve Eisman said.
The investor, whose 2008 crisis prediction was made famous in "The Big Short," cited how the iPhone maker is preparing for AI-based software to trigger a need for new hardware.
"Right now, everybody's focused on Nvidia and AMD and data centers," the Neuberger Berman senior portfolio manager said. "But one day, and that day is not too far from now, there'll be a lot of AI apps that you and I will use, and we're not going to use them at a data center in the cloud."
To instead access AI's full potential, Apple will need to start offering a lineup of fresh tech, from phones to laptops. The potential demand this could create is why Eisman continues to hold the stock.
"I have the new phone. That phone is probably not going to be capable to do some of the apps that you're going to want to do," Eisman said.
The possibility of an AI iPhone has minted other Apple bears as well, with Bernstein's once-neutral analyst Toni Sacconaghi changing tune in a note last week. Among upside catalysts was AI hardware integration, with some expecting the iPhone 16 cycle to start featuring generative AI.
Sacconaghi's bullishness preceded Apple's winning earnings, during which CEO Tim Cook teased big AI announcements to come. The stock also gained as Apple performed better than expected in China, outgrowing concerns of a pullback.
"We expect China iPhone unit growth will slowly turn from a headwind to a tailwind for Apple as Cook & Co. head into a much anticipated AI driven iPhone 16 supercycle starting in September," Wedbush Securities' Dan Ives wrote on Monday: "That said, over the next month much Street focus will be on the drumroll for Apple's AI reveal at [Worldwide Developers Conference] in June."
When it comes to AI, Eisman has previously touted big investments in infrastructure, which would benefit from the tech's massive power demand.