24/7 Wall St. Insights
- Some think that Apple Inc.’s (NASDAQ: AAPL) AI rollout will be too slow to drive significant demand.
- If so, that will drag on the stock price.
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Apple Inc. (NASDAQ: AAPL) will pivot hard toward software that delivers advanced artificial intelligence (AI) features to consumers of its new iPhone 16 via a new operating system, known as iOS 18. Some think that this AI rollout will be too slow and the benefits will only be incremental over time. If so, there may not be an explosion in iPhone 16 sales, which could mute the chance of a stock price rally following the launch of the new handset.
After sifting through the opinions, The Wall Street Journal published the most pessimistic one. David Vogt of UBS said in a report Wednesday that “we don’t view the AI-related offerings as compelling enough in the near term to drive significant demand.” The view gets support from the fact that the iOS 18 AI software release is in October, which could put it more than a month after the iPhone 16 launch. Will buyers of the new iPhone hold off until they see the new iOS features? If so, Apple could struggle.
Additionally, some of Apple’s primary competitors in China, and global giant Samsung, have AI features of their own. Google AI powers Samsung’s newest smartphones.
After a sell-off early in the year, which was mostly due to slow sales in China, Apple stock regained its footing against the S&P 500. The recent runup was because of the belief that the iPhone 16 will get major AI components. This was announced in June, with few details. If the pace disappoints, so will the action of the stock price.
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