Wall Street Lunch: Apple Demos iPhone 16, AI Features (undefined:AAPL)

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The company confirms Apple Intelligence will launch in October. (0:15) ‘Beetlejuice Beetlejuice’ is a hit. (4:07) 50 stocks that could see tax-loss selling. (4:58)

The following is an abridged transcript:

Apple (NASDAQ:AAPL) tried to satisfy the insatiable hunger of all things artificial intelligence at its “Glowtime” event as it unveiled new iPhones, Apple Watches and AirPods.

CEO Tim Cook said the new iPhone 16 is designed for AI from the ground up and “marks the beginning of an exciting new era.”

The iPhone 16 has a 6.1-inch screen size, while the iPhone 16 Plus has a 6.7-inch screen size. It also comes in new colors, including ultra marine, teal and pink, to go along with white and black. It has a new camera control feature, giving users more access to the camera and its features, including visual intelligence.

It also sports the 3 nanometer A18 chip, which is up to twice as fast for machine learning and has 17% more system memory bandwidth. The A18 has a 6-core CPU and is up to 30% faster than the CPU in iPhone 15 and 50% faster than the iPhone 14, while using 30% less power than the A16 Bionic. It also has a 5-core GPU that is 40% faster than the iPhone 15 and 50% faster than the iPhone 14.

The iPhone 16 will also support AAA video games that were only available on iPhone 15 Pro, including Tencent’s Honor of Kings: World, thanks to the A18 chip.

The company confirmed that Apple Intelligence, its AI platform, will launch in English as a beta in October with iOS18.1.

The Apple Watch Series 10 comes with a custom S10 chip, which has a four-core neutral engine and aids Siri, automatic workout detection, crash and fall detection, and improved phone calls, to suppress background noise.

Artificial intelligence will also feature in WatchOS, with tasks such as widgets automatically showing up when a user needs them.

The Apple Watch Series 10 comes with a custom S10 chip, which has a four-core neutral engine and aids Siri, automatic workout detection, crash and fall detection, and improved phone calls, to suppress background noise.

AirPods 4 will use AI for active noise cancellation. It also incorporates adaptive audio to better understand when you are talking to someone.

Apple also showed off a new version of its AirPods Pro headphones, AirPods 2. The new headphones have added health features, including hearing protection, a new hearing test feature and a professional grade hearing aid.

“We estimate that roughly 20% of consumers worldwide will ultimately access and interact with generative AI apps through the Apple ecosystem over the coming years, which all kicks off with iPhone 16 this week.”

Shares of Apple are down more than 1%. They typically see a sell-then-news trade on the day of iPhone events.

Just ahead of the event, Apple bull Dan Ives said: “We estimate that roughly 20% of consumers worldwide will ultimately access and interact with generative AI apps through the Apple ecosystem over the coming years.”

The Wedbush analyst said: “Apple could sell north of 240 million iPhone units in FY25 as this AI-driven upgrade cycle takes hold.”

Among active stocks, McDonald’s (MCD) is attracting attention with its improving traffic trends set to potentially impacting competitors.

Evercore ISI highlighted that the chain’s same-store sales trends turned positive in the back half of August. The firm thinks the brand can potentially squeeze out slightly positive same-store sales growth for Q3, despite the year-over-year consensus estimate being -1%.

Air Canada (OTCQX:ACDVF) said it is finalizing contingency plans to suspend most of its operations as talks with the Air Line Pilots Association have reached a deadlock over the union’s excessive wage demands.

Talks between the company and ALPA, representing more than 5,200 pilots at Air Canada and Air Canada Rouge, continue. But the airline said the parties remain far apart. Unless a deal is reached, beginning on September 15, 2024, either party may issue a 72-hour strike or lock-out notice, which would trigger the carrier’s three-day wind down plan.

And Summit Therapeutics (SMMT) shares soared after its lung cancer drug beat Merck’s (MRK) Keytruda in a late-stage trial. Its investigational bispecific antibody, ivonescimab, reduced the risk of disease progression or death by 49% compared to Keytruda in the first-line treatment of lung cancer patients.

In other news of note, “Beetlejuice Beetlejuice” was the most popular movie this weekend with box-office sales of $110 million for its premiere weekend, according to studio estimates compiled by Comscore.

The Warner Bros. (WBD) sequel to the 1988 cult classic scored the third-best opening of the year behind “Inside Out 2” and “Deadpool & Wolverine.” With an estimated $35.4 million in global sales, “Beetlejuice Beetlejuice” earned a total of $145.5 million in its debut.

“Deadpool & Wolverine” from Disney’s (DIS) Marvel Studio was in second place with $7.2 million in its seventh weekend, lifting its total to $614 million in the United States and Canada.

“Reagan,” the presidential biopic starring Dennis Quaid, advanced to third place in its second weekend with $5.2 million. Among the premiering movies, Indian Tamil-language film “The Greatest of All Time” also was in the top 10.

And in the Wall Street Research Corner, Morgan Stanley’s Mike Wilson screened for stocks that could see pressure from tax-loss selling in Q4.

He looked at candidates that were held widely earlier this year and those with sufficient absolute price returns that would generate a “meaningful tax loss.”

His team looked at sell-side consensus stock ratings as of January 15 to provide for time to deploy capital after the start of the year. With the aggregate holding period data absent, he said they looked for stocks down at least 10% from mid-January through September 3.

The results were then further refined by removing stocks that saw price drops of more than 25% in the same period because those with the largest price falls usually tended to show a rebound in the fourth quarter.

Among the 50 stocks surfaced were XPEL (XPEL), Academy Sports and Outdoors (ASO), Las Vegas Sands (LVS), Mister Car Wash (MCW), SLB (SLB), Boeing (BA), Jabil (JBL) and Host Hotels & Resorts (HOST).

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