Apple's AI Progress Lags Behind, Investor Patience Wearing Thin
N.R. Finch
Apple's WWDC failed to ignite the AI-driven upgrade cycle the market was banking on; the stock posted its worst week since February. A 33× forward P/E now rests on product promises that keep getting delayed.
What exactly disappointed investors?
WWDC landed flat: the redesigned Siri will ship this fall as a beta only, still in development.
The latest AI features will not launch in the EU or China at first — two markets critical to any iPhone upgrade wave.
This means → the core bull thesis — "AI drives a supercycle" — has no visible delivery timeline.
Girard CIO Tim Chubb put it bluntly: "Apple has delayed AI multiple times; it's hard to keep extending the same benefit of the doubt." The firm holds Apple at an underweight.
Is a 33× multiple justified?
Apple trades at a forward P/E above 33×, well above its 10-year average of 23× and second only to Tesla among the Magnificent Seven.
In plain terms = the market has already priced in "Apple will earn a lot more from AI" — but that money hasn't arrived yet.
Post-WWDC, analysts did not raise 2027 or 2028 revenue estimates; FY2027 growth is forecast to slow from 15% to 8.6%, then decelerate further.
Chubb added: "The valuation reflects earnings revisions that haven't happened, built on a product that hasn't shipped and has been delayed repeatedly."
What specific criticisms did Wall Street raise?
KeyBanc analyst Brandon Nispel wrote on June 8 that WWDC "should have been the moment for an Apple Intelligence upgrade cycle, but that thesis no longer appears intact."
He flagged three issues: no clear AI monetization path, heavy reliance on Google's Gemini, and Siri "slightly improved but still behind other large language models."
Needham analyst Laura Martin added on June 9: Apple executives failed to explain how AI would drive incremental revenue or cost savings.
This reflects a deeper concern: Apple's dependence on Alphabet is high — and Alphabet is the biggest competitor to Apple's core smartphone business.
What are the bulls thinking?
The bull case is straightforward: Apple has ample cash, a strong balance sheet, steady earnings growth, and disciplined buybacks.
In plain terms = even if AI is late, Apple's fundamentals — its ability to generate profit and its financial cushion — remain intact.
Argent Capital portfolio manager Jed Ellerbroek said: "Apple's competitive position hasn't been impaired." If the company eventually delivers compelling technology, an upgrade cycle could still materialize.
But he conceded: the latest announcements were "not enough to excite me into wanting to upgrade."
What does the stock price tell us?
Apple posted its worst weekly performance since February after WWDC.
Year-to-date gains sit at roughly 10% versus 19% for the Nasdaq 100 — underperforming by nearly half.
This means → May's 15% single-month rally (the best since July 2022) is being repriced — the optimism behind it lacked WWDC-level validation.
This reflects a broader shift: the market is moving from "giving Apple an AI faith premium" to "demanding execution proof."
Content is for reference only, not financial advice.