Shares of Apple (NASDAQ:AAPL | AAPL Price Prediction) certainly aren’t going for cheap, even after a near-5% December dip, now going for around 33.0 times forward price-to-earnings (P/E). And while Apple Intelligence hasn’t blown away iPhone users quite yet, Apple’s biggest splash in the AI waters is just months away.
Of course, perhaps investors are right to wait and see how the much-anticipated Siri update will fare, given how the initial launch of Apple Intelligence turned out and the aftermath that followed once many consumers felt that the Cupertino-based giant underdelivered after perhaps overpromising a bit too much.
Going into the new year, the tides could turn, and Apple might overdeliver in 2026 after underpromising for most of 2025.
Personally, I think Apple Intelligence’s tough initial launch represents a very rare fumble for the company. And by this time next year, I believe there’s a good chance all will be forgiven if Siri’s long, difficult overhaul pays off.
The coming Siri overhaul might just impress
Could it be that Apple users will delete their handful of AI apps as they embrace Apple’s privacy-focused, and perhaps far more personal AI experience? As always, time will tell, but I do think Apple is in a very unique spot to offer an AI product that takes the ball right into the endzone. And with big changes made atop the AI team, I think there’s a good chance that the firm is ready to step up to the plate to go for what could be one of the biggest swings in recent memory.
Of course, it would have been nice if Apple were one of the first out of the gate with its most powerful and profound features for 2025. But, as Apple’s Senior Vice President of Software Engineering put it, the Siri overhaul was a “much bigger update than we envisioned.”
As we head into Spring 2026, the big question is whether the overhaul will be worth the wait or if it’s going to be met with more disappointment. Either way, I think the bar remains low, with shares of Apple ending off the year just shy of $275 per share.
Expectations are low, but management must deliver a “10 out of 10”
Even Deepwater Asset Management’s Gene Munster thinks the bar is low as it stays stuck in some sort of “AI limbo” of sorts. And while low expectations are part of the reason why Apple might be a surprising performer in the new year, there remains a great deal of execution risk.
And given all the churn in the AI team, it’s unclear as to whether the current management can execute on an effort that may very well be one of the most ambitious in recent memory. Either way, Munster thinks the new Siri must be a “10 out of 10,” and he’s right. There isn’t room for another fault on AI, especially given that customers have been patiently waiting.
If things do go right, perhaps a multiple re-rating could hit swiftly. Webush Securities’ Dan Ives is one of many bullish analysts who think that “Siri 2.0” alongside on-device AI could kick off a big upgrade cycle. If Apple’s Spring update is good enough to convince ChatGPT, Perplexity, and Gemini app users to switch, perhaps we could see iPhone sales kick into high gear as more AI processing comes to the edge.
I guess the big question is what Siri 2.0 can deliver that existing products currently cannot. A deep level of integration is something that I believe only Apple can achieve. If Siri becomes more of a hyper-personalized AI agent backed by one of the most powerful models (Gemini) out there, there is a pathway to becoming a leader in the AI race.
Apple’s underestimated AI advantage
Personally, I think privacy is the competitive edge needed to win the AI personalization race, and, in that regard, I think the big question is whether rivals will be able to keep up with Apple in 2026.
So, by design, I do think that Apple will eventually win the consumer-facing AI race, provided its Apple ecosystem remains sticky. In any case, the big question is when Apple will deliver the profound, game-changing experience. Will it be in the Spring of 2026?
If so, the stock might prove a bargain right now, as the stock looks to find its way to Dan Ives’ $350 per-share price target, which entails a 28% gain from here.
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