Apple stock falls 4% after AI reveal despite analyst optimism on Siri

Apple AAPL shares fell 4.4% on Tuesday, a day after the company unveiled a series of artificial intelligence initiatives at its annual Worldwide Developers Conference (WWDC).

The decline put the stock on track for its worst daily performance since February.

The move came despite largely positive reactions from analysts to Apple's latest AI announcements, including a revamped Siri and new Apple Intelligence features.

Investors appeared to adopt a sell-the-news approach after Apple failed to provide a firm launch date for its new AI-powered Siri assistant.

While developers can already test the software through beta programs, the company said only that a broader release would come later.

Investors sell the news after WWDC

At WWDC, Apple introduced new frameworks that allow developers to access Apple Intelligence across iPhones and Macs.

The company also unveiled Siri AI, a new version of its voice assistant powered by large language models.

Apple said it is also using a cloud model that is "comparable" to leading frontier AI models with assistance from Google and Nvidia.

Despite the announcements, some analysts said the updates lacked major surprises.

"While the company laid out a decent vision and some early personalized/contextual AI use cases, it plans on releasing Siri AI beta later this year, with no concrete timing of a full release," said Baird analyst William Power. "We think that's contributing to the intraday sell-off."

Options markets reflected the cautious sentiment.

Trading volume rose well above normal levels, while put-call skew increased, signaling greater demand for downside protection.

Analysts see monetization opportunities

Although the stock declined, several analysts highlighted the long-term revenue potential of Apple's AI strategy.

Goldman Sachs analyst Michael Ng said Apple could generate additional revenue through subscriptions and usage-based limitations tied to AI features.

"Some features, including image generation, have daily usage limits because they rely on powerful server models," wrote Goldman analyst Michael Ng. "Users will be able to get increased access through most iCloud+ subscription plans, which should drive direct monetization for Apple Intelligence."

J.P. Morgan analyst Samik Chatterjee noted that Apple's AI rollout will initially be limited to English-speaking users in the United States. China and Europe will receive the features later because of regulatory issues.

"While the fall launch of Siri AI in the US will be a significant positive for the holiday sales season, the future roll-out to other geographies as well as other languages will be a critical watchpoint for investors going forward," Chatterjee wrote.

Not all analysts were convinced the new features would significantly boost device sales.

"Despite various interesting AI-related announcements, we leave our iPhone estimates unchanged as we do not believe that the new offerings will drive iPhone demand," UBS analyst David Vogt wrote.

Morgan Stanley sees upgrade cycle ahead

Morgan Stanley analyst Erik Woodring took a more bullish stance. He raised his price target on Apple to $360 from $330 and maintained an Overweight rating.

According to Woodring, the new Siri assistant could trigger a significant hardware upgrade cycle because many existing devices lack the memory required to run advanced AI features.

Morgan Stanley estimates that 1.3 billion iPhones currently in use do not have the hardware necessary to support the upgraded Siri. Roughly 850 million devices cannot run Apple Intelligence at all.

"With less backwards compatibility and clearer use cases, we see WWDC as a net positive," Woodring wrote.

He also pointed to Apple's image-generation and photo-editing tools as key opportunities for future growth.

"We were especially impressed with the photo editing tools, which we expect will be heavily trafficked, and which are Apple's clearest near-term Services monetization opportunity," Woodring wrote.

The analyst believes AI features tied to image generation, editing, and app interactions could drive stronger services growth and encourage users to upgrade both hardware and iCloud subscriptions over time.

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