"AI silence" cannot cover up the narrative of "iPhone upgrade and replacement" as Goldman Sachs maintains a bullish outlook on Apple amidst disappointment at WWDC

According to the Zhitong Finance APP, Apple Inc. (AAPL.US) recently held its WWDC 2025, which, despite lacking significant breakthroughs in AI technology, has led to a nearly 3% drop in its stock price since this week. Its total market capitalization still ranks among the top three in the global stock market and remains one of the AI concept stocks most closely watched by Wall Street financial giants. Goldman Sachs reaffirmed its "Buy" rating on Apple stock after this week's WWDC, giving a target price of up to $253 within 12 months, indicating a potential upside of 30% for Apple’s stock price in Goldman Sachs' view.

The tech giant held its 2025 Worldwide Developers Conference (WWDC 2025) on Monday, but failed to launch substantial major updates in artificial intelligence technology. Nevertheless, Goldman Sachs' analyst team expressed continued optimism about Apple’s stock performance after WWDC 2025, firmly believing that the AI-driven new round of iPhone "upgrade super cycle" has just begun.

"After the WWDC 25 keynote, Apple’s stock price fell by about 1% (last year, the stock price fell over 2% after WWDC 24). Apple only announced its more innovative operating system and design improvements and new features for first-party applications, along with the upcoming launch of its own AI application developer ecosystem, but failed to showcase significant advancements in Apple AI capabilities—namely, Apple Intelligence," Goldman Sachs stated in a recent research report.

The company also confirmed that the major upgrade to transform Apple's Siri voice assistant into a more personalized voice version of an "AI super assistant" may be delayed until next year. This stands in stark contrast to last year's developer conference, where AI ambitions were prominently displayed, with Siri being the core AI feature highlighted and mentioned multiple times, and Apple management expected it to be launched this year. However, the actual smartphone features related to AI have not been as optimistic as shown at last year's WWDC.

Despite significant disappointment in the market regarding Apple AI, Goldman Sachs' analyst team believes that with an unshakeable ecological moat creating consumer loyalty, Apple remains the absolute leader in consumer electronics. The new features are fully aimed at enhancing user experience, including a new interface called "Liquid Glass," AI-driven new functionalities, enhanced visual intelligence, and several features that improve users' quality of life.

The AI-driven iPhone "upgrade super cycle" has just begun

Looking ahead to Apple's future performance growth, Goldman Sachs expects that with the continuous launch of new flagship iPhone models in 2025, 2026, and 2027 driving overall sales and revenue growth, along with the more powerful functionalities of "Apple Intelligence" after updates, Apple’s fundamentals will see significant expansion. Apple management's outlook on the scale of stock buybacks will also continue to grow alongside performance increases.

"We maintain our 'Buy' rating on Apple because we believe that the market's focus on the slowdown in the growth rate of the company's consumer electronics sales completely overshadows the strong sales growth power brought by Apple’s exclusive ecosystem and the unprecedented upgrade expectations driven by AI." "The Goldman Sachs analyst team stated.

Goldman Sachs indicated that Apple's valuation itself, along with fundamental expectations, is expected to re-enter an upward trajectory driven by a new replacement cycle powered by Apple Intelligence, consumers stockpiling iPhones in advance to strengthen the replacement logic, Apple's strong exclusive closed-loop ecosystem, supply chain resilience, and strong bargaining power. In terms of current valuation, Goldman Sachs stated that compared to Apple's historical average valuation levels—both absolute and relative—and compared to the other six major tech giants, Apple's current valuation holds strong investment appeal for global capital.

The Goldman Sachs analyst team emphasized that the super replacement cycle driven by Apple Intelligence has just begun and is expected to drive Apple's performance into a significant upward growth trajectory since the second half of the year. Goldman Sachs anticipates that by the end of the year, the financial market's focus will shift to the new generation of iOS systems and the more powerful "Apple Intelligence" feature modules after updates and iterations, as well as the iPhone 17 flagship series set to be released in the fall of 2025. Goldman Sachs expects these factors to drive bullish sentiment in the market regarding Apple's stock price and the entire "Apple supply chain."

Integrating large AI models with consumer electronics terminals such as PCs and smartphones to create large models capable of offline inference performance on local devices, while also leveraging vast cloud AI computing resources to meet users' deeper personal needs with "edge AI," has become the core content of many global tech companies' "AI planning blueprint."

In the vision of Apple fans for Siri's updates and iterations, under the support of cloud and edge AI large models, Apple's Siri may no longer be a clumsy formal voice assistant. By combining cloud AI computing resources and edge generative artificial intelligence capabilities, Apple's iPhone models are expected to achieve a "personal AI assistant" that better meets individual user needs, similar to the "omnipotent AI companion" in the movie "HER." Apple has stated that the updated Siri voice assistant will be able to utilize users' personal information to answer questions and perform operations across various applications, while also possessing the highest level of privacy protection capabilities.

Morgan Stanley: The market still expects Apple's "AI narrative," but the path to realization may be longer

Another Wall Street giant, Morgan Stanley, recently stated that Apple's WWDC 2025 lacks significant AI breakthroughs, but its AI narrative logic remains an important catalyst for the market's bullish outlook on Apple's stock price. However, the path to realizing the AI narrative may be longer.

Morgan Stanley maintains an "overweight" rating on Apple with a target price of $235, believing that Apple, with its strong ecosystem, user base, and privacy standards, as well as the more powerful "Apple Intelligence" after updates and iterations, still possesses key elements for success in the AI era.

Morgan Stanley stated that Apple introduced several new Apple Intelligence features at WWDC 2025, including broader language support, deep integration with ChatGPT, real-time translation, and other important features. Additionally, Apple has opened its AI large language model to over 30 million potential AI application developers worldwide, marking a new era akin to the App Store moment However, Apple's software business head Craig Federighi expects a more personalized Siri AI voice assistant to be launched in the "next year," which aligns with investor expectations but still has a long timeline. Currently, only 20% of iPhones can support Apple Intelligence, indicating that there is still a significant upgrade opportunity. Morgan Stanley also stated that if Apple charges $9.99/month for a more advanced version of Apple Intelligence in the future, just 10% of the Apple device install base adopting it could cover all costs paid to Google for TAC