Apple shares are wavering this year amid Donald Trump’s tariff plans and his insistence that the company make its flagship product in the US. The stock is down 16% so far this year.
Gene Munster, Deepwater Asset Management managing partner, said in a program on CNBC that Apple is going through a “fluid” situation and talked about a key upcoming event for the company:
“The stock traded off because there were seven questions about the outlook beyond the June quarter, and I think that what we saw on Friday with the US, with the potential tariffs around the iPhone, I think underscore the uncertainty about what’s going to happen beyond the June quarter, beyond the September quarter in this case. In fact, that Tim Cook is navigating something that is uniquely fluid to what he’s encountered for the last 10 plus years. And so I think that that does create a little bit of an overhang. I think that what we’re going to see next week or two weeks from now, WWDC, is going to be critical to how investors think about the Apple Inc (NASDAQ:AAPL) story for the long haul because that, of course, we’re going to hear more about their investment in AI. They have, of course, been behind the curve on that, but it’s rumored that they’re going to be talking about their own large language models, which is going to be a surprise, I think, to some investors. And this kind of plays into this theme that over the next one to three months, it’s going to be a transition period for Apple Inc (NASDAQ:AAPL) investors. But if my math is right and they are going to be pursuing more large and small language models, that probably means that Apple Inc (NASDAQ:AAPL) going to be more aggressively investing in AI infrastructure. And of course, they’re the largest of the mega caps that has been slow to make that investment.”
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc (NASDAQ:AAPL) is desperately in need of new catalysts. The company’s revenue in China fell 8% in fiscal year 2024, following a 2% decline the previous year. The Chinese market accounts for about 15% of Apple’s total revenue, so this downtrend cannot be ignored.
Investors had hopes from the Wearables, Home, and Accessories segment, but so far, its performance has been weak. Vision Pro faces tough competition from Meta’s $500 Quest and the more affordable Quest 3S, making it hard to justify its $3,500 price tag. The failure of Apple’s HomePod, unable to compete with Amazon’s and Google’s lower-priced offerings, further highlights the challenges in this market.
Apple’s iPhone 16 has not shown promising growth prospects yet, and investors are still in a wait-and-see mode on the AI platform.
Sands Capital Select Growth Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q1 2025 investor letter:
“We exited Apple Inc. (NASDAQ:AAPL) in March to fund what we view as compelling additions to existing holdings during the market selloff and to strengthen our cash position for future opportunities. Apple’s inclusion in Select Growth was intended to provide stability to the portfolio. However, in the current market environment, we see greater upside potential in other businesses and view cash as a more effective tool for downside protection and opportunistic deployment. We remain positive on the potential for shorter replacement cycles for computers and mobile devices driven by Apple Intelligence. That said, the delayed rollout of AI features—and Apple’s acknowledgment that some may be indefinitely postponed—could limit its ability to exceed earnings expectations. Apple remains a leading global technology business with a vast hardware and software ecosystem, strong customer lock-in, and powerful network effects. We will continue to monitor its progress and its potential fit within the Select Growth portfolio.”
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Disclosure: None. This article is originally published at Insider Monkey.
