Analysts at Evercore ISIS continue to believe that Apple (NASDAQ:AAPL) will become an AI winner. The firm maintained an Outperform rating and $220 price target on the stock in a note on Tuesday.
The firm said Apple researchers published a paper yesterday that detailed Apple's latest AI innovation, ReALM (Reference Resolution As Language Modeling).
"Apple has indicated that its smaller ReALM models performed similarly to GPT-4 with fewer parameters, which makes it more suitable for delivering on-device AI vs the more typical approach of handling all of the AI functionality in cloud datacenters," stated analysts. "Apple's larger ReALM models are reportedly able to outperform GPT-4."
According to analysts, the new technology will be integrated into Siri to improve performance, with the key innovation appearing to be around reference resolution, which refers to how AI can understand references to on-screen data as well as more conversational context.
"Apple simplifies the normally complex task of reference resolution by converting all on-screen data to text, which is far easier for an LLM to parse relative to images," added analysts. "This is the key feature that enables Apple to deliver high performance with a more limited number of parameters."
"We continue to think Apple becomes an AI winner when they solve on-device inference in a way that enables a new iPhone Supercycle," declared analysts. "This looks like a step in that direction and confirmation that Apple is focused on AI at the edge."