Apple’s AI Features Are Arriving as AI Hype Cools
In four days, Apple is expected to unveil its long-overdue AI features at the iPhone 16 launch event. But the timing couldn’t be trickier — the AI craze that once fueled the market is starting to cool off. AI stocks are dropping left and right as markets grow cautious about the technology’s short-term benefits and high valuations. According to Bloomberg, Apple has climbed nearly 40% since April and is trading at a 50% premium to its 10-year average — but history suggests the stock may be due for a pullback.
- Investors hope these AI features will kickstart Apple’s revenue, which has fallen in five of the last seven quarters — though analysts predict only 1.8% growth for fiscal 2024.
- Apple shares also tend to underperform after iPhone debuts, falling on 12 of the past 17 launch days.
Hype, meet reality: The AI frenzy that’s gripped the tech sector is starting to lose steam. UBS, which had been bullish on ASML since Aug. 2022, downgraded the European chip equipment maker, warning that AI’s earnings growth potential may be overhyped. This comes after Nvidia shares pulled back following its earnings report last week, and AI-beneficiary Super Micro — up 300% this year — dropped nearly 20% after short-seller Hindenburg Research accused it of accounting manipulation.
