Shares of Apple (NASDAQ:AAPL) have been faltering again, thanks in part to renewed fears of President Trump’s tariffs on China. Just when investors thought CEO Tim Cook and company were able to put the matter behind them, there’s a new haze of uncertainty surrounding the future of U.S.-China trade, especially if 100% tariffs do end up hitting soon. Still, with Apple’s big investment commitments, the Cupertino, Calf.-based giant stands to benefit from exemptions.
Either way, a deterioration of the U.S.-China trade relations isn’t great news for corporate America, and especially not for Apple — a firm that stands to benefit most greatly if both nations were to reach a peaceful resolution to the trade war.
Despite the recent setback, which helped nudge shares of AAPL down close to 4% from recent all-time highs, I still think the setup is looking quite good going into the final few months of the year and much of 2026. In this piece, we’ll check in on three timely drivers that I think could power Apple stock to a much more pronounced breakout after a year of flat gains (AAPL stock up just 1% year to date).
The iPhone 17 Might Have Kicked off an Upgrade Cycle
The iPhone 17 has been met with better-than-expected demand, at least so far, and that’s helped power shares of AAPL to its prior all-time highs. Still, the big breakout has proven quite elusive, and it’ll take more strength in iPhone 17 to help fuel one, at least in my view.
With the iPhone 17 Pro and Pro Max models, in particular, experiencing impressive demand, early signs might suggest that the “upgrade cycle” might finally be kicking off. Indeed, with a lot of aging devices in desperate need of a replacement, the flashy new design of the iPhone 17 Max may very well be enough of a reason to make the leap, even though the upgrades are more incremental compared to last year’s model.
It’s not just the iPhone 17 demand that could help fuel what I view as the start of a multi-year iPhone upgrade cycle (or even a super-cycle if demand surprises to the upside).
Don’t Forget About iPhone Air Sales
With the iPhone Air recently getting the green light to sell in China, the impossibly-thin model might just contribute more to sales than analysts are anticipating. Indeed, there are technical trade-offs to be had by going for the super-thin iPhone. Most notably, Apple settled for a single camera, a lower battery (though there is an attachable battery pack sold separately) and forgoing the vapor chamber tech for optimized cooling, which was a big selling point of the iPhone 17 Pros.
In any case, I think Apple made some worthy trade-offs that could make the iPhone Air appeal to a crowd of users who value form factor over functionality. Indeed, the iPhone Air’s profoundly impressive design, I think, is enough to win over consumers who want something that looks and feels truly next-gen. While the iPhone 17 is pulling much of the weight, I wouldn’t discount the Air’s potential as well, especially in the Chinese market, where eSIM functionality just got the green light to work with China’s top wireless carriers.
Yes, there’s novelty with the iPhone Air, but the big question is whether the trade-offs are limited enough to convince users to buy anyway. For many, the iPhone Air is good enough. And since it’s arguably more impressive than the iPhone 17 in hand, I think there’s blockbuster potential that Wall Street hasn’t yet caught on to.
Of course, we’ll have to wait and see how the device fares in future quarters. Either way, with a super-thin model and a foldable in the works, Apple is giving consumers options, and that might allow the firm to keep its upgrade cycle running stronger for longer. With strong shipments for the iPhone 17 in China, my guess is that Apple is back to gaining ground in the region again after a challenging year.
New AI Features and Announcements
Finally, new AI features are sure to act as a major booster for AAPL shares, especially if new features and announcements are enticing enough to attract more of an AI multiple. While 2025 was a relatively quiet year for Apple’s AI, I do think that 2026 could more than make up for it, with a big Siri overhaul rumored for the spring season and the deeper integration of Apple Intelligence across iOS, iPadOS, macOS, and more.
Combined with the all-new M5 series chips, which offer more AI firepower in the next generation of devices, and I think Apple is ready to make its biggest splash in AI to date. Add the potential for more AI partnerships and the potential to invest further in AI companies, as other firms have been doing of late, and I see a lot of AI tailwinds coming to Apple.
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