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Apple Making AI Data Centre Moves

Analyst Team trader
Updated 7 May 2024

In a bold move that will send ripples through the technology sector, Apple Inc. (NASDAQ: AAPL) is taking significant strides into artificial intelligence by developing specialised chips intended to efficiently run AI software within data centre servers. Codenamed ACDC, this initiative is a testament to Apple's long-standing commitment to innovation and its focus on future-facing technologies.

The ACDC project is not a recent brainstorm; it has been in the furnace of development for several years. During this time, Apple has not only been perfecting the technology in-house but has also been collaborating closely with Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), a world leader in chip making. This partnership combines Apple's cutting-edge design strategies with the manufacturing prowess of the semiconductor giant, likely leading to breakthroughs in chip performance and efficiency.

Central to this new foray into hardware is a chip designed expressly for executing artificial intelligence models. These will predominantly focus on inference tasks, a phase in AI where trained models are used to predict and interpret real-world data. Inference is a pivotal part of bringing AI capabilities to consumer applications, and with these specialised chips, Apple aims to deliver these functionalities more seamlessly than ever before.


By honing these AI capabilities, Apple positions itself to compete more aggressively with the likes of Microsoft and Meta, both of which have staked substantial claims in the rapidly expanding AI terrain. The technology leaders' pursuit of enhanced AI through chips underscores the industry-wide arms race to develop AI infrastructure that is not only powerful but also energy-efficient and capable of on-the-fly learning.

Despite this potential forward leap in technology, Apple's financial standing in the stock market reflects the broader climate of uncertainty and adjustment. The stock is down about 2.12% year-to-date, a statistic that stands in contrast to the general performance of tech stocks this year.

Nevertheless, market analysts maintain a positive outlook on Apple's financial health. The average price target on Apple's stock stands at $186.40, signifying an upside potential of 2.58% from current levels. This price target consensus indicates that analysts feel the stock is pretty fairly priced.

As Apple continues to push the envelope in AI and computing, industry observers await to see how the new chips will influence its offerings. While financial trends can ebb and flow, what remains evident is Apple's relentless pursuit of technological advancement, a hallmark that keeps it at the forefront of the competitive tech landscape.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.