TL; DR
Apple investors are losing patience with the company’s AI strategy after a disappointing WWDC. Shares are trading at a multiple-time premium, implying a delayed upgrade cycle, and the new Siri is being launched as a beta, built on Google technology.
Apple investors are losing patience with the company’s AI strategy. The stock is having its worst week since February after the annual Worldwide Developers Conference He failed to convince Wall Street is closer to the arrival of the long-promised upgrade cycle.
“There is a bit of fatigue with Apple and AI,” Tim Chubb, chief investment officer at Girard, a Univest Wealth Division, told Bloomberg.Because there are so many delays, it’s hard to extend them the same benefit of the doubt that we used to.”
The failure of WWDC
Apple’s overhauled Siri AI assistant will launch this fall, but only as a beta. Company has rebuilt Siri on a special Google Gemini model Nvidia runs on Blackwell GPUs, making it heavily dependent on the infrastructure of its biggest rival.
The new AI features won’t initially be available in the European Union or China, two of Apple’s most important markets. This is the second time Apple Intelligence has been delayed in Europethis time with no timetable for a resolution after the company and EU regulators reached an impasse over the Digital Markets Act requirements.
Analysts mostly shrugged. According to Bloomberg, no analysts revised their revenue estimates for 2027 or 2028 after the conference call, suggesting the presentations didn’t add anything the market hadn’t already priced in.
Not delivered
Apple trades at more than 33 times estimated earnings over the next 12 months, well above its 10-year average.
This award refers to the AI-based iPhone upgrade cycle, which has been promised since 2024 and has been repeatedly delayed. Shares rose 15% in May on pre-WWDC optimism, its best month since July 2022, but gave back some of those gains in the following days.
Revenue growth is expected to pick up from 6.4% in fiscal 2025 to around 15% in fiscal 2026, which ends in September. Analysts see that pace slowing to 8.6% in fiscal 2027 and slowing further thereafter, making it difficult to justify the current valuation without a clear catalyst.
Bull work and its limits
The counterargument is simple: Apple has a huge cash pile, a clean balance sheet, steady buybacks and an installed base of over a billion devices. It also builds a framework for third-party AI extensions For Siri, this could make the iPhone a distribution platform for Claude, ChatGPT and Gemini.
Stocks rose on Tuesday after Bloomberg reported that camera-equipped AirPods, a next-generation foldable phone and a 20th-anniversary iPhone are in the works for 2027.
“It wasn’t terrible, but it wasn’t very encouraging eitherJed Ellerbroek, portfolio manager at Argent Capital Management, told Bloomberg.I feel like Charlie Brown with football when it comes to Apple and AI.“
Needham analyst Laura Martin was more circumspect. apple “It hasn’t done anything to show that it can charge for AI tools and capabilities or save money from using AI.” he wrote, adding that it appears “overly dependent” at Alphabet, its biggest competitor in the smartphone business.
