Apple Inc. NASDAQ: AAPL started the week with an almost perfect setup. Many components of the strong results, the market that has been making stock prices slightly higher in the hope of AI, and more expectations of what will be announced at the Worldwide Developers Conference (WWDC), which runs from June 8-12.
The stock got off to a good start, too, briefly hitting an intraday high of $317 on June 8 after Apple announced its new Siri AI. It looked, for a moment, like a fitting reward for investors who have endured a tumultuous start to the year and supported the idea that the benefits of the Apple ecosystem will eventually translate into AI relevance.
Apple Today
- 52 week interval
- $195.07
▼
$317.40
- Dividend Yield
- 0.37%
- The P/E ratio
- 35.48
- Target Value
- $314.59
However, almost immediately, the stock began to give up those gains.
The obvious question is whether the market got it right or wrong. The company announces a long-awaited, really important AI product development, and the stock drops nearly 2% in response. That's the kind of reaction that might signal to sharp-eyed investors that they're rightly spotting disappointment or an overreaction that opens up a buying opportunity.
While the first optics aren't great and support the original, there are reasons to think these will eventually play out.
What Apple Actually Announced
The Siri AI shown at WWDC was a real eye-opener, even if the stock reaction on the day didn't show it. The new Siri is more capable and conversational than anything Apple has offered before, and in the company's words, “is the most capable and personal assistant.”
It can handle complex multi-step requests, pull device content like messages and photos, work with Visual Intelligence to understand the virtual world through the camera, and save conversations seamlessly across iPhone, iPad, Mac, and Apple Watch.
By Amazon.com Inc. NASDAQ: AMZN recently announced its AI update for Alexa, Apple responded with a notable update to its voice assistant. At first glance, it seemed like they had achieved a milestone, but the stock began to fall.
Why Apple Stock is Selling
As for why sentiment is swinging so hard in the stock, it seems that the market saw the Siri AI update as confirmation that Apple is still closing the AI gap instead of closing it completely.
In context, Siri AI will not launch until later this year, and even then, it will only be a beta launch in English in the United States. Other languages and regions, including key markets such as the EU and China, will follow only after further regulatory coordination.
That timeline isn't outrageous for the company that first promised a more personal Siri at WWDC 2024. The fact that Apple will also have to pay Alphabet Inc. NASDAQ: GOOGL billions of dollars in the coming years to help power Siri with Google's Gemini model didn't help, as it emphasized that Apple still lacks a completely independent AI model of its own.
For investors who have been pricing in too much speed, the disclosure felt more like a confirmation of continued progress than a moment to change course. In a market where AI announcements are judged by the bar constantly raised by OpenAI's ChatGPT or Anthropic's Claude, being competent and conversational is clearly not enough to make investors happy.
Why a Selloff Can Be a Mistake
However, there's a chance that's short-term thinking, because despite the stock's decline, Evercore and Sanford Bernstein both reiterated their Outperform ratings. This followed similar moves from Wedbush, Citigroup, and Morgan Stanley earlier this month.
Apple Stock Forecast Today
$314.59
7.54% changedBuy Medium
Based on 35 Analyst Ratings
| Current Price | $292.54 |
|---|---|
| High Forecast | $400.00 |
| Average prediction | $314.59 |
| Low Prognosis | $200.00 |
Apple Stock Forecast Details
Wedbush's new price target of $400 is pretty hard to beat, as it means there is close to 30% upside to be had from current levels.
The bull's case doesn't really hinge on Siri being the best AI assistant on the market right now. It depends on Apple owning a reliable endpoint where hundreds of millions of users will end up interacting with AI, regardless of which underlying model it powers.
The installed base of active devices, control of ownership, payments, and access to the application, and the deep attachment to the ecosystem Siri AI will accelerate over time the arguments that justify the repetition of the premium, and the announcement of June 10 did not underestimate any of them.
In fact, Gemini's partnership and development of the device model arguably strengthens the platform's argument rather than weakens it.
In that context, the selloff looks like a classic case of the market reacting to what was announced rather than what it meant. For investors with more than the next few weeks, this decline could be an important buying opportunity.
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