Apple shares reach record after China approval for AI features

Apple shares rose to a record high Wednesday after the company secured approval to use Apple Intelligence in China, according to CNBC. The development gives Apple a potential support in one of its most important smartphone markets, where IDC said its share rose to 18.1% in the second quarter from 13.9% a year earlier.

CNBC reported that Apple will use Alibaba’s models to power artificial intelligence features on devices sold in China. Apple is also working with Baidu, according to CNBC. No formal launch date has been set.

The approval addresses a key product gap for Apple in China. Apple Intelligence, the company’s suite of AI tools, requires newer hardware because older iPhone generations lack the processing capacity to run the features, according to CNBC. That creates a possible upgrade incentive for consumers considering the latest iPhone models.

China remains a central market for Apple, both as a sales region and as part of the wider global smartphone supply chain. The AI rollout could add momentum in a market where Apple has recently gained share despite weaker industry conditions. IDC said China’s overall smartphone market contracted in the second quarter, citing higher prices for memory and components.

The mechanism is straightforward: generative AI features on smartphones generally depend on local computing power, cloud-based models, or a combination of the two. In China, foreign technology companies often need local partnerships and regulatory approval before offering AI services. CNBC said Apple’s arrangement will rely on Alibaba’s models for Chinese devices, with Baidu also involved.

The news came during a mixed session for technology shares. CNBC said the broader market was slightly higher Wednesday after a second consecutive cooler-than-expected inflation reading helped lift sentiment and pushed Treasury yields lower. Lower yields can support growth equities by reducing the discount rate investors apply to future earnings, though individual stock moves also reflect company-specific news.

Semiconductor and AI-related stocks weakened after the open and selling intensified during the session, according to CNBC. The outlet said no specific catalyst for the selloff was clear, and noted that the group had been volatile in recent weeks while still retaining substantial gains for the year.

Shares of large technology companies that buy advanced computing equipment, including Amazon, Meta Platforms, Alphabet and Microsoft, were among the session’s bigger gainers, CNBC said. Apple was the biggest gainer in the CNBC Investing Club portfolio on Wednesday.

Investors are also watching upcoming corporate results and economic data. CNBC said United Airlines and J.B. Hunt were scheduled to report after Wednesday’s close, while Taiwan Semiconductor Manufacturing, GE Aerospace, Abbott Laboratories, UnitedHealth, Prologis and State Street were due before Thursday’s open. June retail sales and pending home sales data were also expected Thursday.

This story draws on original reporting from CNBC.