Apple’s AI Push Fails To Impress Wall Street: Analysts Say New AI Features Won’t Spark iPhone Upgrade Cycle

Apple presented a host of new AI-related features at its Worldwide Developers Conference post which multiple analysts raised a cautious tone regarding these offerings and its impact on iPhone demand.

• Barclays kept an ‘Underweight’ rating on Apple with a price target of $253 on the stock.
• UBS does not expect new AI features to be a ‘material driver’ of iPhone demand.
• Apple showcased a sweeping AI overhaul branded as Apple Intelligence at its WWDC event.

Shares of Apple Inc. (AAPL) were on investors’ radar premarket on Tuesday as multiple analysts took a cautious stance on the iPhone maker after it unveiled a range of new AI features at the Worldwide Developers Conference (WWDC).

At the time of writing, AAPL stock was flat on Tuesday.

Why Wall Street Is Not Buying The AI-Upgrade Cycle Narrative

Apple’s AI strategy took center stage at the WWDC on Monday; however, analysts are not convinced that it will translate into stronger iPhone sales.

Barclays kept an ‘Underweight’ rating on Apple with a price target of $253 on the stock, implying roughly 15% discount from its Friday’s closing price.

Barclays stated that Apple’s Siri AI and Apple Intelligence are ‘interesting though not necessarily transformative’ and that the announced changes and updated features are ‘incremental, and not enough to drive an upgrade cycle’ for the iPhone. The firm also flagged a broader concern, saying it struggles to see what the monetization of Apple's AI offerings will look like, according to TheFly.

After the company’s presentation at its developer conference, UBS also commented on Apple and kept its ‘Neutral’ rating on the company, with a price target of $296.

The  firm said that Apple made multiple AI related announcements in addition to  privacy at the event but UBS believes, even though these features add value to the user experience, it does not expect these announcements to be a ‘material driver’ of iPhone demand ahead of the expected launch of a foldable device in the fall.

UBS also added that Apple’s ‘AI journey is likely to be iterative over the next couple of years.’

AAPL’s WWDC Highlights

Apple's WWDC keynote, held Monday, showcased a sweeping AI overhaul branded as Apple Intelligence. The company demonstrated a context-aware Siri that can understand on-screen content, take actions across apps, and maintain conversational memory. Other features include AI-powered writing tools, image generation.

Apple brought advanced Siri AI features at its WWDC event but did not provide a specific launch date. Its official website stated that Siri AI will be launched later this year and will be compatible with iPhone, iPad, Mac, Apple Watch, Apple Vision Pro.

Siri AI won't launch initially in the European Union (EU), and new AI features are not yet coming to China, the company noted.

Following Monday’s announcement, Apple stock suffered the biggest single-day drop in nearly three weeks.

What Retail Thinks Of AAPL

On Stocktwits, retail sentiment surrounding the stock has improved to ‘neutral’ from ‘bearish’ while message volumes increased to ‘high’ from ‘normal’ in the past 24 hours.

AAPL stock has gained over 11% so far this year.

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