Apple Faces 18-Month Deadline To Deliver On AI, Says Analyst

Apple Inc. AAPL has 18 months to revamp its Apple Intelligence strategy, according to a leading analyst. The analyst also predicts the release of a folding iPhone in 2026.

What Happened: Investment firm TD Cowen has set a deadline for Apple to make its AI strategy more compelling. The firm believes that Apple has until the end of 2026 to achieve this, reported AppleInsider on Monday.

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Despite the predicted moderate earnings growth and the launch of folding devices, TD Cowen anticipates that the factors that led to the increase in Apple’s target price will take longer to improve. The firm, however, maintains its target price of $275 and advises investors to buy shares.

TD Cowen’s analysts have shared their insights ahead of Apple’s next earnings call on July 31, 2025. They believe that Apple’s iPhone shipments have remained broadly seasonal, with a 4% year-over-year increase in 2025. This growth is attributed to declining sales in China and an incomplete AI strategy.

TD Cowen expects Google GOOG GOOGL to introduce the Pixel 10 with advanced AI features that Apple will be pressured to match. The firm projects that AI-related challenges will continue over the next two quarters, with Apple Intelligence unlikely to deliver a meaningful uplift for the current or next iPhone lineup.

Despite the hurdles, TD Cowen believes Apple has an 18-month window to position Apple Intelligence as a standout feature. The firm also anticipates that Apple will unveil at least one foldable device during this period—predicting the launch of the iPhone 18 Fold in September 2026, with projected sales of 7 to 10 million units.

Why It Matters: Apple’s AI strategy has been under scrutiny for some time. Investors have been pressuring Apple to revamp its AI strategy following a significant decline in its share price. Earlier, tech analyst Gene Munster suggested that Apple had approximately two years to rectify its AI strategy, which aligns with TD Cowen’s 18-month deadline.

Despite these challenges, Apple is expected to rebound in the latter half of fiscal 2025, with the launch of new product cycles, including a ‘slim’ iPhone. This potential rebound is being closely watched by investors ahead of Apple’s Q3 earnings release.

With TD Cowen’s deadline, the pressure is on for Apple to enhance its AI capabilities and deliver on its product promises to maintain investor confidence and drive growth.

Benzinga's Edge Rankings place Apple in the 79th percentile for quality and the 33rd percentile for growth, reflecting mixed performance in both areas. Check the detailed report here.

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