There’s been a lot of buzz surrounding Apple (NASDAQ:AAPL | AAPL Price Prediction) after its big WWDC week. The latest Siri AI innovations look quite impressive, but, of course, if we’ve learned anything from the initial rollout of Apple Intelligence, it’s that we should reserve judgment until we’ve actually had a chance to test out the waters. Indeed, iOS 27 is on the way, and I’m sure a lot of Apple fans are excited for what could be the biggest, most transformative update in the company’s history.
With Apple Foundation models and Google — a subsidiary of Alphabet (NASDAQ:GOOGL) — underneath the hood, perhaps this is the moment where Apple is able to surpass expectations with AI after greatly falling short of the mark just under two years ago. It’s been a long wait, to say the least. And there’s certainly no guarantee that things are going to be flawless as Siri enters the advanced AI age.
In a prior piece, I highlighted a very compelling case outlined by Apple stock bull Erik Woodring of Morgan Stanley (NYSE:MS). He noted that a lot (more than 1 billion) devices won’t benefit all too much from the coming update.
Your iPhone probably can’t run the most advanced features of Siri AI
The on-device AI is very memory-hungry, to say the least, with 12GB of RAM needed to get the most out of the latest Siri (think the advanced processing beyond core features). And right now, it’s not cheap to get RAM. But as Apple looks to convince users to upgrade despite the inflation we’ve seen on RAM and storage, a powerful on-device AI is one way.
Of course, the many iPhone 16 Pro upgraders looking forward to Apple Intelligence a while back may have been left with a bad taste in their mouths.
Will these same users be convinced to upgrade to the iPhone 18 Pro at the end of the year?
Time will tell. But I certainly wouldn’t bet against the coming slate of iPhones being a massive hit. I think Apple has finally nailed it with AI, and despite the higher demands, it’s my view that we’re entering a new kind of era where smartphones are AI-first devices.
AI as the driver?
In a prior piece, I pointed to AI as a potentially top reason to upgrade in the near future as edge AI finally proves its utility. I’m not the only believer in the technology’s ability to power iPhone sales, either. Erik Woodring seems to be in the same boat.
But, of course, it’s quite unrealistic to expect 1 billion iPhone users to line up on the release day of the iPhone 18 Pro. What’s most exciting is what the next couple of years could hold. iOS 27 and Siri AI could be the exciting iPhone sales booster for the year ahead. But, you have to remember that iOS 28 will mean an even better Siri will follow. And my guess is that it’ll be just as RAM-hungry if not more so.
And, of course, perhaps the latest and greatest NPU will help deliver even better performance. With that, I think the iPhone 20 that follows (Apple’s rumored to skip past 19) could be one of the most successful iPhones in recent memory.
Remember the earlier days (think the iPhone 3G, iPhone 4, iPhone 5 days) of the iPhone when each iteration pole-vaulted over the last? I think we could be returning to those days, especially as Apple’s AI gets better and users just “need” to get the latest to get their on-device AI running at full speed! Indeed, an exciting prospect for Apple investors.
Why $440 per share might be the more realistic target
When on-device AI collides with new form factors (no notch or dot?) and next-generation hardware, I think it might be tough to pull the brakes on what could be a multi-year boom that helps take Apple well past the $400 mark.
As a part of Erik Woodring’s bull case (and $440 price target), he sees a replacement cycle that sees strength beyond a single year. In fact, as many as 500 million iPhones shipped in two years — that’d be a record-breaker. In my view, Woodring is not only spot on, but I think his bull case scenario is far more probable than the base case, which entails a $360 price target.
Perhaps outgoing CEO Tim Cook has one more thing to spoil Apple shareholders with before he hands over the baton to John Ternus come September.
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