10 AI Stocks Analysts Are Watching

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 166

Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Analysts Are Watching. On January 20, Aletheia Capital analyst Warren Lau lowered the price target on the stock to $205.00 (from $215.00) while maintaining a Sell rating.

According to the firm, Apple’s hardware margins have peaked and face pressure until the company raises prices or pushes harder on supplier negotiations. Memory costs are set to triple year-over-year in the first quarter of calendar 2026, with further increases in the second quarter.

The firm believes that the memory budget for the iPhone 17 will jump 80-100% sequentially in the second quarter, followed by a further 30–40% QoQ increase in the third quarter as the tech giant replenishes depleted inventories through January supplier renegotiations.

As a result, it anticipates iPhone17’s Bill of Materials to rise 500–600 basis points in 2Q26E, cutting gross margin by about 400bps, with a further ~250bps decline in the third quarter. Aletheia Capital noted that other hardware products may face even greater margin pressure due to lower profitability.

At the same time, the firm noted how Apple is accelerating its research and development investments focused on AI deployment.

Apple is accelerating R&D investment—up 25–30% YoY—focused on AI deployment, which could dilute operating leverage. Despite these headwinds, iPhone 17 demand remains robust. We have trimmed EPS forecast and cut our target price to $205 (SOTP) from $215.

Apple is a technology company known for its consumer electronics, software, and services.