Apple

Investment Thesis

Apple Intelligence adoption is gradual and iPhone 16 cycle tracking is in-line with our base case. Services growth remains the primary earnings driver but faces regulatory headwinds in Europe. We maintain a Hold rating with a price target of $235.

What Changed

The iPhone 16 cycle is neither a disappointment nor a significant beat — it is tracking roughly in line with a normal tick cycle. The AI features (Apple Intelligence) are available on more devices than initially launched with, but consumer adoption rates are hard to measure and the sell-through data does not clearly show AI-driven upgrade acceleration.

Services growth at 14% year-over-year is healthy, but the App Store faces margin pressure from the EU Digital Markets Act’s sideloading requirements. If third-party app stores gain meaningful traction on iOS, Apple’s 30% commission model faces structural disruption.

Vision Pro

Vision Pro sales are tracking well below initial production targets. Apple has reportedly cut orders with its supply chain. The spatial computing thesis is intact for the long term, but the near-term contribution to earnings is immaterial.

Bull Case

A re-acceleration in Services growth driven by new subscription products (streaming bundles, financial services expansion) could justify a premium multiple. Apple Fitness+ and Apple Card’s health data integration represent underappreciated monetization vectors.

Path to Buy

We would revisit our Hold on clear evidence that Apple Intelligence is driving measurable upgrade cycles or meaningful Services revenue acceleration above 17%+ growth.