Apple event seen largely ‘as expected’ by Wall Street

Wall Street’s reactions to the announcements from Apple’s (NASDAQ:AAPL) annual fall product event seem to be centered on one sentiment: “largely as expected.”

Shares fell 1% in premarket trading on Tuesday.

“Apple’s new hardware product announcements were largely in line with expectations, and more evolutionary than revolutionary,” Bernstein analyst Toni Sacconaghi wrote in an investor note. Sacconaghi, who has an Outperform rating and $240 price target on Apple, said the inclusion of sleep apnea detection for the Apple Watch and hearing aid functionality for Air Pod Pros, were surprises, but the artificial intelligence demos were “somewhat underwhelming.”

“While we expect Apple to aggressively market AI functionality, we see the possibility that consumer upgrades could be pushed out until later this year/ iPhone 17, given the slow AI rollout,” Sacconaghi posited. “This appears increasingly captured by consensus, which is forecasting below average iPhone seasonal growth for the December quarter and 8% growth in iPhone revenues for FY 25.”

Several other sell side analysts followed that line of thinking, including Wells Fargo analyst Aaron Rakers.

“Apple launch event mostly as expected,” Rakers wrote in an investor note. “We [continue] to see Apple Intelligence functionality w/ in iPhone 16 (along w/ historically low upgrade rates) as a positive refresh driver into ’25; however, investor sentiment will likely need more convincing.”

Rakers has an Overweight rating and $275 price target on Apple.

Piper Sandler analyst Matt Farrell also noted that the event was “was largely as expected,” though he highlighted a few positives.

Apple’s tweaks to the Camera Control is an “exciting consumer innovation,” while the stable pricing could be seen as a “positive,” especially in an uncertain consumer spending environment, Farrell said. Additionally, the health features on the Apple Watch and AirPods Pro were seen as “impressive.”

On the flip side, the staggered rollout of Apple Intelligence could “dampen broader excitement” and the fact remains that it will still require users to be educated on it.

“Overall, our stance remains unchanged, with the stock already pricing in the ‘super cycle’ excitement at current levels,” Farrell added. He has a Neutral rating and $225 price target on Apple.

“The Start of an AI Driven Era?”

Wedbush Securities analyst Dan Ives also said that the details of the event were “generally in-line with our expectations,” though he noted that the “cautious” rollout of AI is likely to benefit Apple in the long run.

“…[We] believe the careful rollout of Apple Intelligence features over the next [six to nine] months is the right strategy to catalyze a major upgrade opportunity within Apple’s installed base,” Ives wrote in an investor note, adding that more partnerships in China are likely to come to help “fill in a missing piece of the AI puzzle.”

“The new era of personalization and how consumers interact with their iPhones has now begun, and we believe this will cause a renaissance of iPhone growth (high-single-digit growth upside) for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025,” Ives, who raised his price target to $300 from $285, added.