Gene Munster of Deep Water Asset Management discussed the recent decline in Apple’s stock due to delays in AI features like Siri, expressing disappointment but maintaining optimism about iPhone sales growth in the coming year. He emphasized the need for Apple to expand its ecosystem and highlighted potential growth in emerging markets, while cautioning that cuts in capital expenditures by tech companies could negatively impact stock prices and investor sentiment.
In a recent discussion, Gene Munster of Deep Water Asset Management shared his insights on Apple’s current stock performance and its implications for the company’s future, particularly in light of delays in AI features like Siri. Apple’s stock has seen a decline of 9% since Monday, marking its worst week since November 2022. Morgan Stanley has lowered its price target for Apple from $275 to $252, attributing this to the postponed rollout of advanced Siri capabilities. Munster expressed disappointment over the delay, noting that it has affected his expectations for Apple’s growth trajectory.
Munster reflected on his previous optimism regarding Apple’s potential to revolutionize user experience through its AI initiatives, which he believed would significantly enhance the iPhone’s appeal. However, he acknowledged that the current situation is not as promising as he had anticipated. He emphasized the need for Apple to expand its ecosystem and allow developers to contribute to its AI features, which he believes are crucial for maintaining the company’s competitive edge in a rapidly evolving tech landscape.
Despite the setbacks, Munster remains optimistic about the iPhone’s sales growth in the coming year, suggesting that current market estimates may be conservative. He pointed out that while the market is projecting only 1% growth for this year, there is potential for a more significant increase, especially as new features are rolled out. Munster believes that the stock’s upward movement will depend on the successful implementation of these features and the resulting impact on revenue and earnings.
When discussing geographical growth prospects, Munster noted that while there has been disappointment in China, he sees potential in emerging markets like India and a recovery in the U.S. market. He believes that Apple can navigate tariff challenges effectively, thanks to strategic investments and relationships with U.S. leadership. Munster highlighted that while China poses challenges due to rising nationalism and consumer behavior, the company’s strengths in the U.S. and Europe will be key drivers of growth.
Finally, Munster addressed concerns regarding potential cuts in capital expenditures by major tech companies, suggesting that such a move would likely lead to a significant decline in stock prices across the board. He indicated that a reduction in spending would signal broader macroeconomic uncertainties, negatively impacting investor sentiment and the overall AI sector. Munster’s insights reflect a cautious yet hopeful outlook on Apple’s future, emphasizing the importance of innovation and strategic growth in maintaining investor confidence.