Apple (AAPL.US) becomes Citigroup's top pick in AI, new iPhone expected to spark upgrade cycle

Citi has named Apple (AAPL.US) its top pick for AI-related stocks before 2025, ahead of Nvidia (NVDA.US) and Arista Networks (ANET.US).

The firm's analysts said early feedback from developers on iOS 18's AI features, including the recently launched AI-powered object removal feature, was positive and should provide a "compelling" reason for consumers to upgrade their iPhones. In addition, the analysts added that the recent appointment of Kevan Parekh as the company's new CFO and the Department of Justice's case against Google (GOOGL.US) should not cause investors to worry too much.

Apple is planning to hold its annual fall product launch event on September 9, and there is widespread expectation that the company will unveil new iPhones, as well as new versions of Apple Watch, AirPods and other products.