AAPL Down 18% YTD as Apple's AI Delays Erode Investor Confidence

Business Insider

8 hours ago

Apple Inc. (AAPL) has long been the most reliable name in tech. It offered predictable product cycles, loyal customers, and industry-defining design. Investors called it boring in the best possible way. That was before 2025.
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This year, AAPL is down nearly 19% while the rest of the so-called 'Magnificent Seven' soar. Microsoft (MSFT), Nvidia (NVDA), Meta Platforms (META), Alphabet (GOOG) (GOOGL), Amazon (AMZN), and Tesla (TSLA) have all bounced back sharply. The S&P 500 (SPY) and Nasdaq have pushed higher on AI tailwinds. AAPL is the only one lagging.
'Siri, Why Are You Lagging? '
The reason sits at the core of Apple's identity. Artificial intelligence was supposed to be the company's next leap. A redesigned Siri, powered by new large language models, would act as a smart assistant across apps, emails, and calendars. It was shown off last year under the banner of 'Apple Intelligence.' Ads aired. Expectations built. Then came the delays.
According to recent reports in The Financial Times and The Wall Street Journal, the upgrade is nowhere near ready. Internal demos fell flat. Engineers cited hundreds of bugs. Ads featuring The Last of Us star Bella Ramsey were quietly pulled. Executives have now postponed the launch indefinitely. One former Apple leader called the AI plan a stumble. Investors agree.
Sentiment Is Cooling
TipRanks data shows a cooling in analyst sentiment. There are fewer 'Strong Buy' ratings than a year ago. Several top-rated analysts have lowered price targets. Hedge fund activity in AAPL has also slowed. Insider confidence is muted. After years of being a consensus favorite, the stock is now drawing caution.
The problems run deeper than software bugs. Regulators have delayed Apple's AI rollout in China. CEO Tim Cook has been pulled into political crossfire as former President Donald Trump returns to the White House. New tariffs on China-made electronics have added pressure to Apple's supply chain. Cook has pledged $500 billion in U.S. investments, but most iPhone production still takes place overseas.
While Apple delays its AI rollout, the company's financial engine is quietly shifting. As shown below, gross profits from high-margin services have begun to rival hardware, underscoring why the stakes for Apple Intelligence are rising.
AI Roadmap Remains Unclear
At the same time, Apple's competitors have widened the AI gap. Microsoft is investing heavily in OpenAI and building custom data centers. Meta and Google are deploying their own foundation models across billions of users. Apple, in contrast, is now leaning on OpenAI to power parts of Siri. The company's privacy-first approach has also limited its ability to train cloud-scale models.
With WWDC set to begin, expectations are low. Investors are not looking for surprises. They want evidence that Apple can deliver what it has already promised. Whether that means releasing a functional Siri upgrade or showing meaningful progress elsewhere in its AI roadmap remains unclear.
In the meantime, AAPL still rests on a solid foundation. It has over 2 billion active devices and a growing services business. But the stock's premium valuation was built on the assumption of leadership. For now, the market is rethinking that assumption.
Is Apple Stock a Buy, Sell, or Hold?
average price target for AAPL stock is $228.65, suggesting a 12.13% upside.