Apple (AAPL) - Get Report shares marched higher on Thursday as investors and analysts re-rated the iPhone maker’s long-term growth prospects following reports that it will partner with South Korean automaker Hyundai-Kia to build a so-called Apple Car.
Shares of Apple were up 1.11% at $135.43 in trading Thursday following reports that it was close to reaching an agreement with Hyundai-Kia to build autonomous electric vehicles beginning in 2024.
Apple ended the trading day Thursday down 0.78% at $133.94.
Apple and Kia both got a boost on Wednesday following a report from Korean newspaper DongA Ilbo that Apple was investing 4 trillion won ($3.6 billion) in Kia to build the Apple Car. Apple will set up production with Kia and build Apple cars at its Georgia plant, according to the news report.
While unconfirmed, expectations that Apple is partnering with a car company to enter the EV market will only add to Apple’s long-term growth story, influential Wedbush Securities’ research analyst Dan Ives wrote in a research note to clients.
“We continue to believe it’s a matter of when, not if, Apple enters the EV race,” Ives said, noting that Apple’s foray into electric vehicles “... will add another $30+ per share of TAM to the Apple growth story over the next few years, given the golden age of EV transformation on the horizon.”
Project Titan, as it's been called internally at Apple, has been scaled down significantly from its initial ramp-up a few years ago, though now appears to be front and center again on Apple's radar screen, Ives wrote.
To that end, Ives said he won’t be surprised to see Apple strike deals for additional strategic partnerships with the likes of a Tesla (TSLA) - Get Report, Volkwagen and other automakers including China's NIO (NIO) - Get Report and Xpeng (XPEV) - Get Report.
To be sure, Apple’s automotive ambitions with Hyundai-Kia have been a poorly kept secret.
Hyundai earlier this month announced and then backed away from a statement confirming it was in preliminary talks with Apple on developing a self-driving car.
The apparent slip of the proverbial tongue caused a big stir, not only because of how investors reacted to the initial news but because of Apple's notoriously tight-lipped approach to announcements and partnerships.