Apple (NASDAQ:AAPL) is ready to unveil the much-anticipated iPhone 16 lineup on September 9, 2024, a day earlier than the rumored date. Indeed, the big day will be all about Apple Intelligence. However, more importantly, it’ll be about the new generative AI details we didn’t hear about during the company’s WWDC (Worldwide Developers Conference) 2024 event held in June.

As investors mark their calendars and tune into next Friday’s keynote, Apple CEO Tim Cook and his team must pass a high bar to keep Apple stock from sinking. History suggests AAPL stock will gravitate lower during the event as new products and features struggle to impress against expectations in real time. Still, the stock may ultimately trend higher in the months and years following the event, even if the coming “It’s Glowtime” keynote — which references iPhone’s borders glowing around the screen’s edges when the redesigned Siri is summoned — reveals nothing that we weren’t already expecting.

• Apple is sure to be a major mover when it unveils its next iPhone next week.
• Expectations and hopes will be high, but the Cupertino giant can still impress if Siri steals the show.
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Apple Intelligence Needs to Be a Ground-Breaker

In a prior conference call, Mr. Cook noted that his firm was poised to “break new ground” in generative AI. At this juncture, it’s not yet clear what he meant by breaking new ground.

Was he referring to the slew of mildly amusing AI features (Private Cloud Connect, ChatGPT partnership, AI emojis, and ease-of-use features) showcased at the last WWDC? Or is there something genuinely jaw-dropping on tap for next week? Undoubtedly, a multimodal Siri demo that matches the smarts of the profoundly impressive ChatGPT-4o demo may be enough to shock and awe in a way that Apple hasn’t in a keynote since the passing of Steve Jobs.

Either way, if there’s a perfect time to break new ground, shock, and awe, it’s the September 9 event. And given Tim Cook isn’t one to overpromise and underdeliver, I’d have to give him the benefit of the doubt as Apple takes to the stage next week. The stage is set, and analysts will be all over the event looking for new details to add to their financial models and investment theses. Will they find them? Time will tell.

Is Apple Stock Too Hyped Ahead of the Sept. 9 Event?

Undoubtedly, there’s been quite a bit of AI hype priced into Apple shares since the 37% trough-to-peak rally began in April. The stock went from being a non-AI-savvy play in the Magnificent Seven to one of the top plays that cash in on consumer appetite for AI products. The AI-enabled iPhone 16 Pro may very well be the very first big-ticket investment that everyday consumers make in generative AI.

Of course, a ChatGPT Plus subscription is a modern-day staple in the AI age. However, at just $20 per month, it’s hardly a substantial expense for consumers. With ChatGPT integrated into Apple Intelligence into iOS 18 (the next big iPhone operating system update), questions linger as to whether the value proposition from Apple Intelligence will be considerable enough for users to justify dropping a few grand on a new phone.

Besides impressive software updates (Siri), Apple must sell us on its new A-series chip (likely the A18) and describe what its new neural engine can do that the non-AI-enabled iPhone chips (A16 and below) can’t.

Apple Intelligence: It’s a Clear Catalyst, So Says Morgan Stanley

Indeed, numerous analysts cite aging iPhones and AI-ready hardware as drivers behind a looming device supercycle. Morgan Stanley (NYSE:MS), which had AAPL stock as one of its top picks for July, is among the more prominent firms on Wall Street that believe in Apple Intelligence, referring to the technology as a “clear catalyst” for upgrades.

Early signs suggest the beta release of iOS 18.1, which has some Apple Intelligence features, lacks anything “ground-breaking.” That said, Apple has a chance to show the public what they really want with a Siri update for the LLM age; perhaps a full-on supercycle would be more in the cards than a mini upgrade cycle.

At a relatively steep 34.6 times trailing price-to-earnings (P/E), there’s some magnitude of AI hype baked in right here. However, I’d argue a mini super-cycle is priced in, rather than a supercycle, the likes of which we may not have seen since lockdown. The way I see it, Apple gave us some tasty appetizers in WWDC. But whether it serves up a main course on September 9, though, remains the $4 trillion question.

The Bottom Line on AAPL Stock

AAPL stock has historically underperformed during big events. Chalk it up to buying on rumor and selling on the news, if you will, but Apple shareholders have been in for rough rides during even the most historic events (think WWDC 2024 and the Vision Pro unveiling last year).

It will be interesting to see how the latest iPhone and iOS 18 stack up against Alphabet’s (NASDAQ:GOOGL) Google Pixel 9 Pro device, which launched its AI-enabled phone weeks ahead of Apple. If iPhone 16’s reveal can blow Pixel 9 out of the water, perhaps there’s still upside ahead for AAPL stock as odds of a supercycle inch higher.

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