NEW YORK, Aug 23 Reuters Billionaire hedge fund manager Daniel Loeb sees room for Apple39;s stock price to climb, especially if the technology company successfully harnesses artificial intelligence for its iOS mobile operating system.

Despite the stocks recent strong appreciation, we see room for significant upside ahead as the magnitude of this new AI opportunity surprises, Loeb wrote to his investors in a letter seen by Reuters on Friday. Third Point built a position in Apple in April, Loeb wrote.

Loeb, whose firm oversees some 11 billion in assets, wrote that Apple was already one of the firm39;s top five winners during the second quarter when its TP Offshore Fund gained 1.8. During the first half, the fund returned nearly 10.

Apple, Loeb wrote, had been underowned by institutional investors who feared the company might become an AI loser. But Third Point has a different view, noting AIrelated demand could drive a step change improvement in Apple39;s revenue and earnings over the next few years.

Demand for newer iPhones will grow as Apple Intelligence features will not be backwardscompatible and Apple39;s App Store will likely be the primary distribution platform for new consumerfocused AI apps, the letter said.

Reporting by Svea HerbstBayliss; editing by Jonathan Oatis

Source Reuters