TLDR
- Apple’s WWDC 2025 opens with muted Wall Street expectations after delayed AI rollout from 2024
- Apple Intelligence features launched with poor reviews, new Siri still missing after promised redesign
- Stock down 19% year-to-date, making it worst Magnificent Seven performer besides Tesla
- Privacy concerns limit Apple’s AI capabilities compared to competitors using Nvidia technology
- Warren Buffett’s Berkshire Hathaway has sold substantial Apple holdings in recent quarters
Apple heads into its 2025 Worldwide Developers Conference facing skeptical investors and unfulfilled AI promises from last year. The tech giant’s stock has tumbled 19% this year, earning it the dubious distinction of being the worst-performing Magnificent Seven stock except Tesla.
The company’s AI struggles began when OpenAI’s ChatGPT launch in November 2022 caught Apple off guard. While Apple had successfully integrated AI into specific features like photo and video enhancement, Siri remained far behind the new generation of conversational assistants.
Apple’s annual Worldwide Developers Conference kicks off Monday, when CEO Tim Cook will get a chance to shift the narrative for the iPhone maker as worries about tariffs and AI feature delays have weighed on the company’s stock this year. https://t.co/mphTV9SQ3n
— Investopedia (@Investopedia) June 7, 2025
At WWDC 2024, Apple unveiled Apple Intelligence with features like text generation and notification summaries. The centerpiece was supposed to be a redesigned Siri that could work across apps and create automated workflows from simple commands. That promise remains unfulfilled.
The AI rollout was delayed last fall, and when features finally arrived, they excluded the new Siri entirely. Early user reviews were harsh, with tech reviewer Marques Brownlee noting in November that Apple’s “huge thing that’s going to change everything” was starting to fade as a promise.
Technical Hurdles Mount
Apple’s commitment to privacy and security has created unexpected obstacles in the AI race. The company prefers on-device processing to protect user data, but consumer devices lack the computing power for advanced AI features.
Apple built Private Cloud Compute to maintain privacy while adding cloud capabilities. However, this proprietary approach puts the company at a disadvantage compared to competitors using Nvidia’s widely adopted technology.
As a fallback, Apple relies on ChatGPT integration, where it cannot guarantee the same privacy protections. This creates a conflict between Apple’s core values and AI performance expectations.
An Apple spokesperson admitted to blogger John Gruber in March that the new Siri would take longer than expected to deliver. CEO Tim Cook made similar remarks during the May earnings call.
Financial Performance Reflects Struggles
The stock traded at $204.75 in premarket Monday, up 0.4% but still well below its peak. Apple currently sits 21% below its all-time high, with a price-to-earnings ratio of 32.
Evercore ISI analyst Amit Daryanani wrote that expectations are “rightfully tempered this year at WWDC relative to prior years.” Ben Reitzes of Melius Research suggests management is making behind-the-scenes strategy adjustments.
Warren Buffett’s Berkshire Hathaway has been selling Apple shares over recent quarters, adding to investor concerns. The Oracle of Omaha’s moves often signal broader market sentiment shifts.
Apple’s growth engine shows signs of slowing, with net sales up less than 7% between fiscal 2021 and 2024. The first six months of fiscal 2025 saw growth of just over 4%.
Market Position Remains Strong
Despite current challenges, Apple maintains over 2 billion active devices worldwide. This massive installed base means any successful AI features will instantly reach enormous audiences.
The company’s ecosystem creates high switching costs for consumers, maintaining competitive advantages even during rough patches. Apple’s brand recognition and pricing power remain unmatched in the industry.
Apple generated $24.8 billion in net income during its latest fiscal quarter, demonstrating continued profitability despite AI setbacks. The company’s financial position remains robust with nearly $3.1 trillion in market capitalization.
China manufacturing relationships face ongoing tariff uncertainties under the current administration. CEO Tim Cook acknowledged these trade tensions make near-term forecasting challenging.
Analysts expect earnings per share to grow at 8.8% annually through fiscal 2027. However, some question whether this growth rate justifies the current valuation without a margin of safety.
Apple has historically succeeded despite not being first to market in PCs, smartphones, tablets, or smartwatches. The company eventually created category-defining products in each space, though AI leadership may prove more challenging than previous technology shifts.
The company is expected to outline more specific product plans at its September event rather than during this week’s developer conference.
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