Apple investors losing patience with AI delays after WWDC



TL;DR

Apple investors are losing patience with the company’s AI strategy after a disappointing WWDC. The stock trades at a premium that assumes an upgrade cycle that has been repeatedly delayed, and the new Siri launches as a beta built on Google’s technology.

Apple investors are losing patience with the company’s AI strategy. The stock is coming off its worst week since February after the annual Worldwide Developers Conference failed to convince Wall Street that a long-promised upgrade cycle is any closer to arriving.

There’s a bit of fatigue with Apple and AI,” Tim Chubb, chief investment officer at Girard, a Univest Wealth Division, told Bloomberg. “It’s hard to extend them the same benefit of the doubt we used to since there have been so many delays.”

The WWDC letdown

Apple’s overhauled Siri AI assistant will launch this autumn, but only as a beta. The company rebuilt Siri on a custom Google Gemini model running on Nvidia Blackwell GPUs, making it heavily dependent on its largest competitor’s infrastructure.

The new AI features will not initially be available in the European Union or China, two of Apple’s most important markets. It is the second time Apple Intelligence has been delayed in Europe, this time with no timeline for resolution, after the company and EU regulators reached an impasse over Digital Markets Act requirements.

Analysts largely shrugged. According to Bloomberg, not a single analyst adjusted revenue estimates for 2027 or 2028 after the conference, a sign that the presentations added nothing the market had not already priced in.

Priced for execution it has not delivered

Apple trades at more than 33 times estimated earnings over the next 12 months, well above its 10-year average of 23. It is the second most expensive stock among the Magnificent Seven, trailing only Tesla.

That premium assumes an AI-driven iPhone upgrade cycle that has been promised since 2024 and repeatedly delayed. The stock rallied 15% in May on pre-WWDC optimism, its best month since July 2022, but gave back a chunk of those gains in the days that followed.

Revenue growth is expected to hit roughly 15% in fiscal 2026, which ends in September, up from 6.4% in fiscal 2025. Analysts see that pace slowing to 8.6% in fiscal 2027 and decelerating further after that, which makes the current valuation hard to justify without a clear catalyst.

The bull case, and its limits

The counterargument is straightforward: Apple has an enormous cash pile, a pristine balance sheet, steady buybacks, and an installed base of more than a billion devices. It is also building a third-party AI extensions framework for Siri that could eventually turn the iPhone into a distribution platform for Claude, ChatGPT, and Gemini.

Shares got a lift on Tuesday after Bloomberg reported that camera-equipped AirPods, a next-generation foldable phone, and a 20th-anniversary iPhone are all in development for 2027. But the report noted that timing “remains fluid and could change,” which at this point could double as a motto for Apple’s entire AI strategy.

It wasn’t terrible, but it wasn’t super encouraging either,” Jed Ellerbroek, portfolio manager at Argent Capital Management, told Bloomberg. “When it comes to Apple and AI, I feel like Charlie Brown with the football.

Needham analyst Laura Martin was more pointed. Apple “did nothing to suggest that it can up-charge for its AI tools and capabilities, or save money from using AI,” she wrote, adding that it looks “overly dependent” on Alphabet, its biggest competitor in the smartphone business.



Source link

Leave a Reply

Subscribe to Our Newsletter

Get our latest articles delivered straight to your inbox. No spam, we promise.

Recent Reviews


TL;DR

Meta stripped NameTag facial recognition code from its AI app one day after WIRED exposed it on 50 million phones. Meta says no decision has been made.

Meta removed nearly all traces of an unreleased facial recognition system from its smart glasses companion app on Friday, one day after WIRED reported that the software had been quietly embedded in an app installed on more than 50 million phones. The feature, which Meta internally called NameTag, was designed to convert faces captured by the company’s Ray-Ban smart glasses into unique biometric signatures and compare them against a database stored on the user’s device. WIRED also found that faces the system failed to recognise were cropped, indexed, and stored locally for future processing.

Andy Stone, Meta’s vice president of communications, told WIRED on Monday that the feature is “purely exploratory,” adding that no final decision has been made on what to do with it. That characterisation sits uneasily with the evidence WIRED documented. The version of Meta AI published the day of WIRED’s Thursday report contained several code libraries explicitly named for face recognition, a process for running the NameTag recognition pipeline, and a “Person recognised” alert the app would have shown if someone were identified.

Friday’s release stripped all of it out, along with a folder where the app would have stored the cropped images and biometric signatures of unrecognised faces. Meta did not answer WIRED’s questions about why the code was removed or whether the changes were planned before the story was published. A few fragments remain in the latest version, including an internal debug menu label and a dormant link meant to open a recognised person’s profile, pointing to parts of the system that are no longer there.

The 💜 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!

The gap between Meta’s public statements and the code WIRED found is the central tension. Before the Thursday report, Stone dismissed the findings by writing that the company could not answer questions about how the system would work because “the feature does not exist.” Andrew Bosworth, Meta’s chief technology officer, called the reporting “incredibly misleading” and “absolutely dishonest.” Yet the code was functional enough to include three AI models, one to detect faces, another to crop them, and a third to encode them as biometric data, all embedded in the companion app for a product already at the centre of a mounting privacy crisis.

Meta declined to answer ten questions WIRED posed before publishing, including whether it had already created the database of face profiles NameTag uses, how long the app retains photographs and biometric data of unrecognised people, and whether that data would ever be sent back to Meta’s servers. The company also did not respond to questions about whether it was building NameTag for blind or low-vision users, or to criticism from privacy advocates who warned the system could let stalkers and abusers identify strangers in public.

NameTag first surfaced in February, when The New York Times, citing internal Meta documents, reported that the company was developing face recognition for its smart glasses and considering a launch as early as this year. One internal memo reportedly described releasing the feature during a “dynamic political environment” when privacy and civil liberties advocates would be distracted by other concerns. WIRED subsequently found that much of NameTag’s machinery had been built into the Meta AI app as early as January, months before any public acknowledgement, adding another layer to the company’s pattern of shipping first and disclosing later when it comes to its smart glasses.

Kade Crockford, director of the technology for liberty programme at the American Civil Liberties Union of Massachusetts, said the removal does not undo the original decision to ship the code and pointed to it as evidence that consumer privacy needs stronger legal protection than Congress has been willing to provide. The Massachusetts House of Representatives last week unanimously passed a consumer privacy bill that, if enacted as written, would impose strong enforcement provisions including a private right of action allowing aggrieved users to sue. “State lawmakers need to do their job and step up to protect consumer privacy,” Crockford said.

Meta’s sneaky tactics in slipping the face-recognition code into its smart glasses show exactly why data privacy bills need the teeth of strong enforcement,” Crockford added. “Companies like Meta prioritise their bottom line, so lawmakers need to speak in the only language its C-suite understands.” Whether a code removal prompted by investigative reporting constitutes a victory or merely a tactical retreat depends on what Meta does next, and on whether the regulatory pressure building on both sides of the Atlantic produces enforceable consequences before the feature quietly returns under a different name.



Source link