Apple stock gloom deepens as pressure to show AI progress mounts

Instead, the stock’s slump has only deepened.

The Cupertino, California-based firm has revealed very little about its AI efforts, with Chief Executive Officer Tim Cook promising the company’s shareholders last week that Apple would “break new ground” in AI. Investor impatience is growing, with the stock slumping 9% this year, pulling its market value below Microsoft Corp.’s.

“There’s been a real focus on how Apple hasn’t come out with some killer product in a very long time,” said David Klink, senior analyst of equity research at Huntington National Bank. “Obviously it’s been kind of a hard time for Apple holders to watch Nvidia and whatnot.”

Apple’s pivot comes as iPhone sales remain sluggish, with sales in China plunging during the first six weeks of this year. Its biggest new product release in years, the Vision Pro headset, is a long way off from contributing to sales growth in any meaningful way.

Wall Street is becoming more skeptical of the megacap giant. Apple was recently removed from Goldman Sachs’ conviction list and Evercore ISI’s tactical outperform list. The company has the lowest ratio of buy ratings to holds and sells since 2020.

“Forget the car, what matters most for this stock is the AI strategy launch,” Melius Research analysts led by Ben Reitzes wrote in a note dated March 4. “To us, it is the most important launch since the iPhone.”

While Apple’s move away from EVs has been broadly welcomed, analysts are looking for the company to release its own generative AI product. Samsung Electronics Co.’s updated Galaxy line of smartphones can live-translate phone calls, transcribe voice recordings and use generative AI to fill in parts of photos.