Apple Inc. (NASDAQ:AAPL) has emerged as one of the most overbought stocks on Wall Street following its recent surge to record highs, driven by its foray into consumer-centric artificial intelligence (AI.)
What Happened: Apple's stock has seen an almost 8% increase this week, following the company's announcement of new AI features at its annual Worldwide Developers Conference.
This has propelled the stock price beyond the $200 mark, making it the second-most overbought stock on Wall Street this week, based on its 14-day relative strength index (RSI,) reported CNBC.
Apple's RSI is now almost 83, indicating a potential slide of over 3%, according to analysts. The surge in Apple's stock comes amid a positive week for the S&P 500, which gained 1.69%, and Nasdaq Composite, which rose 3.54%.
Other overbought stocks this week include Nvidia Corp. (NASDAQ:NVDA), Hewlett Packard Enterprise Co. (NYSE:HPE), and The TJX Companies Inc. (NYSE:TJX).
Broadcom Inc. (NASDAQ:AVGO) has also experienced a significant increase, with its stock now considered overbought.
Why It Matters: Apple's recent stock surge follows its overtaking of Microsoft as the world's largest company by market cap. This shift occurred after Apple's annual WWDC event, where it unveiled several new software features.
The tech industry's current strength, particularly in AI, has led to a remarkable surge in stock prices, reminiscent of the dot-com bubble. The RSI of tech stocks compared to blue chips has topped the peaks of the dot-com era.
The semiconductor industry, in particular, has seen a record-breaking increase in valuation, driven by AI.
Despite concerns of a potential bubble, Steve Eisman, the investor famous for predicting the 2008 housing crash, expressed confidence in the U.S. economy's resilience, attributing it to the strong market performance driven by AI and infrastructure investments.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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