Apple’s (NASDAQ: AAPL) approach to artificial intelligence spending continues to lag behind its “Magnificent Seven” peers, a strategy that has drawn mixed reactions from analysts. However, recent developments, particularly reports from Chinese AI start-up DeepSeek, have led some investors to reassess the company’s long-term positioning in the AI race.
Despite this, Apple’s most pressing concern remains iPhone demand. With its fiscal first-quarter earnings set to be released after the market closes today, all eyes are on whether the company can deliver solid growth.
BofA Securities analyst Wamsi Mohan maintains a bullish outlook, highlighting strong initial demand for the iPhone 16. In a recent research note, he reaffirmed his ‘Buy’ rating on Apple with a $253 price target, expecting the upcoming report to reflect healthy consumer interest in the latest device.
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Wall Street’s mixed sentiment on Apple shares
Even among bullish analysts, concerns about Apple’s valuation and market headwinds persist. Oppenheimer analyst Martin Yang recently downgraded the stock to Perform from Outperform, citing weakening iPhone sales and an already stretched valuation.
Yang noted that with softer-than-expected iPhone demand since last September, Apple could struggle to outperform expectations in the near term.
The two dominant risks shaping Apple’s outlook are the slow rollout of its AI initiatives and macroeconomic challenges in China. The company first introduced its AI software, Apple Intelligence, in June, but a delayed October launch limited its initial market impact.
Notably, the rollout has been geographically restricted, and even in available markets, not all AI capabilities have been fully deployed. While Apple has made progress in expanding access, a global release remains uncertain.
At the same time, China remains a critical pressure point. A combination of declining consumer spending, regulatory concerns, and increasing competition from domestic smartphone brands has led analysts to revise downward their iPhone sales projections in the region. These headwinds could weigh on Apple’s overall revenue growth, especially as China remains one of its most important markets.
Long-term bulls see opportunity for AAPL stock
Despite the short-term headwinds, some analysts argue that the broader market is overreacting to Apple’s challenges. Wedbush analyst Dan Ives remains among the most vocal bulls, dismissing fears of an Apple downturn as overblown.
In his latest note, Ives emphasized that with approximately 300 million iPhones not upgraded in the past four years, Apple is only at the beginning of a major multi-year upgrade cycle.
Still, analyst sentiment remains cautiously optimistic, with TipRanks rating Apple as a moderate buy. The average price target stands at $243, implying a slight 1.52% upside from current levels. Among 30 analysts covering the stock, 18 maintain ‘Buy’ ratings, 8 recommend ‘Hold,’ and 4 rate it as a ‘Sell.’
Apple’s upcoming earnings report will be pivotal in shaping its near-term trajectory. While the company has long-term tailwinds in the form of an iPhone upgrade cycle and expanding AI initiatives, short-term risks tied to iPhone demand and macroeconomic pressures in China remain significant.
Investors will be closely watching management’s guidance, which could determine whether Apple maintains its upward momentum or faces renewed resistance.
From a technical perspective, Apple has established a support zone between $221.69 and $224.48, shaped by multiple trendlines across different time frames. On the upside, resistance between $255.60 and $259.03 may limit further gains unless a compelling catalyst emerges.
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