Apple Inc. and Investor Expectations for AI and iPhone Growth
In a recent CNBC segment, Deepwater Asset Management highlighted that Apple Inc. (NASDAQ: AAPL) might benefit from growing investor optimism surrounding AI advancements and iPhone sales as we approach the latter half of 2025. Gene Munster shared his perspective on this potential.
“I also believe there’s an extra benefit here because, in a sense, we’re resetting expectations. People shouldn’t anticipate much from us regarding AI next year. Resetting these expectations is something that could play to investors’ favor, keeping them low for next year.”
Looking at sales, Munster pointed out that iPhone numbers have indeed taken a hit recently, but he finds some positives in that situation.
“The number of iPhones sold has declined significantly over the last six months. At the end of last year, investors were hopeful for around 6% growth in iPhone sales this year, but we’re seeing more of a 1% to 4% range. While the platform overall should perform well with certain iPhone metrics, there are also expectations for the new Siri release next year.”
Apple is in urgent need of new catalysts. The company’s revenue in China dropped by 8% in 2024 and saw a 2% decrease the year before. This isn’t a trend to overlook, especially since the Chinese market makes up about 15% of Apple’s total revenue. Hopes were high for growth in wearables, home products, and accessories, but results have been underwhelming. The Vision Pro faces stiff competition from Meta’s more affordable offerings, complicating its justification for a steep $3,500 price. Additionally, the HomePod’s struggle to compete against cheaper alternatives from Amazon and Google underscores ongoing challenges. The anticipation surrounding Apple’s iPhone 16 isn’t showing much promise, and investors are somewhat hesitant regarding the AI platform’s potential.
Columbia Seligman Global Technology Fund provided some insight on Apple Inc. (NASDAQ: AAPL) in their recent Q1 2025 Investor Letter:
“The fund has maintained an underweight stance on Apple throughout the quarter. Like many other tech stocks, Apple’s shares experienced a pullback, compounded by specific challenges faced during this period. The launch of the AI-enhanced Siri has been delayed, attributed to it taking longer than anticipated, with an announcement expected later this year. Furthermore, the U.S. Department of Justice is pursuing similar actions from its previous administration, attempting to block Google’s payments to secure default search engine status on devices.”
While there’s acknowledgment of AAPL’s potential, there’s a belief that certain AI stocks might provide higher returns with less risk. If you’re interested in an affordable AI stock benefiting from current tariffs and regulations, there’s a free report available for review.
