Gene Munster Highlights AAPL Has An iPhone Headwind And A Price Hike Tailwind — Here’s What He Said About Siri AI

Munster said the bigger question beyond Apple's September-quarter guidance is whether the company can convince investors that it has the capabilities to compete in AI.

• Munster expects investors to focus less on Apple CEO Tim Cook's remarks about the iOS 27 Siri beta and more on concrete rollout updates.
• He said investors want clarity on when the new Siri will exit beta, or at least become available to all users as a standard software update.
• Munster also said any timeline for expanding the new Siri to Europe and China will be closely watched.

Deepwater Asset Management's Gene Munster said Apple Inc. (AAPL) faces a headwind from its staggered iPhone release schedule over the next six months, but believes price hikes should act as a tailwind for the company's outlook.

Munster said in a post on X that Apple's Siri AI updates are likely to shape investor sentiment following the company's third-quarter earnings due after the bell on Thursday.

“My optimistic outlook may come across as aggressive considering the high bar, with the Street looking for 21% iPhone growth in June, and 18% in September, compared to the segment that was up on average 2% per year from FY22-FY25,” he said.

Apple shares were down nearly 2% in Thursday’s midday trade.

Munster Believes Siri AI Will Drive Sentiment

Munster said the bigger question beyond Apple's September-quarter guidance is whether the company can convince investors that it has the capabilities to compete in AI.

While he expects Cook to paint a positive picture of the new iOS 27 beta featuring Siri, Munster believes investors will focus less on those remarks and more on concrete rollout updates.

Specifically, he said the focus will be on clarity about when the new Siri will exit beta, or at least become available to all users as a standard software update while remaining labeled as beta, similar to Apple Intelligence.

Munster also said any timeline for expanding the new Siri to Europe and China would be closely watched.

Munster’s Expectations About Apple’s September Quarter Guidance

Munster expects Apple's September-quarter guidance to come in line with or slightly above Wall Street estimates.

He said the headwind from the staggered iPhone 18 launch should be offset by higher prices, leaving the overall outlook slightly better than consensus, which he said currently calls for roughly 12% year-over-year revenue growth.

Munster attributed his optimism to three factors. First, he said the iPhone continues to benefit from an upgrade cycle driven by the strong sales recorded in fiscal 2021.

Second, he believes the staggered launch schedule could push some customers who would normally buy a lower-priced iPhone to upgrade to a higher-end Pro model.

Finally, Munster expects Apple to raise iPhone prices by an average of about 15%, arguing that while higher prices could soften demand, the net effect should remain positive for revenue.

What Wall Street Is Expecting From AAPL

Wall Street expects Apple to report earnings per share (EPS) of $1.89 on revenue of $109 billion, according to Fiscal.ai data. During the same period a year ago, Apple reported an EPS of $1.57 on revenue of $94 billion.

According to TheFly, BofA called the company’s newly announced Apple Upgrade program “directionally positive,” saying the leasing platform could encourage customers to upgrade devices sooner while allowing Apple to capture more residual value from its hardware ecosystem. The firm reiterated a ‘Buy’ rating and a $380 price target on the stock.

Apple’s market capitalization also briefly topped $5 trillion earlier this week, making it only the second company in the world after Nvidia Corp. (NVDA) to cross the milestone.

What Retail Traders Think Of AAPL Stock

Retail sentiment on Stocktwits around Apple trended in the ‘neutral’ territory, with message volumes at ‘high’ levels at the time of writing.

AAPL stock is up 22% year-to-date and 59% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 17% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 20%.

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