Investors Skeptical About Apple AI

By Douglas A. McIntyre Published Oct 7, 6:20AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Investors Skeptical About Apple AI — © 2014 Getty Images / Getty Images News via Getty Images

24/7 Wall St. Insights

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) investors and iPhone 16 customers are waiting for the iOS 18.1 launch.
If the launch falls short of expectations, the value of the shares is in peril.
Also: Discover the Next Nvidia.

Apple Inc. (NASDAQ: AAPL) investors got excited about the artificial intelligence (AI) features that would run on the iPhone 16, which was first announced at the Worldwide Developers Conference in June. However, the major AI features will not be available until the release of iOS 18, Apple’s operating system, in October. That caused some anxiety. Would people buy an iPhone 16 released in September if the main AI features were unavailable until a month later?

The enthusiasm for iOS 18 has faltered. While Apple’s stock is up 17% this year, it has underperformed the market, which is higher by 19%. If iPhone 16 sales were extraordinary, or its anticipated AI features were likely a leap forward, the stock would have done better.

Two things have kept Apple’s stock down. First, there is no evidence that the AI in iOS 18 is a leap forward compared to the AI products from competitors like Microsoft, Amazon, or Alphabet.

Second, iPhone 16 sales did not spike as iPhone releases usually do in September when new models are released. CNN recently reported, “Apple sold just an estimated 37 million units in the first weekend of iPhone 16 pre-sales, down more than 12% compared to the same period last year, according to a blog post from Ming-Chi Kuo, an Apple analyst with TF International Securities.” The figure could be flawed. No one outside Apple management has accurate figures. However, the sentiment is that the lack of iOS 18 has hurt iPhone sales. And, perhaps, worrying that its AI features are mundane is another drawback.

The new iOS 18, also known as iOS 18.1, will be available in a few weeks. The expected release date is October 28. However, that is speculation.

Investors are waiting for October 28 (if that date is correct). If iOS 18.1 falls short of expectations, the value of Apple’s stock is in peril.

Prediction: Apple Turns Rotten in October

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.