Warren Buffett’s Berkshire Hathaway ($BRK.A) took a big bite out of its AppleAAPL

holdings, but Wall Street isn’t ready to discard the tech giant just yet. The famed investor’s conglomerate slashed its stake in the iPhone maker by nearly half in Q2, from ~$140B to ~$84B. The move has sparked both jitters and optimism among investors weighing Apple’s long-term prospects.

Rotten Apple or ripe opportunity? Some see Buffett’s pullback as a red flag, speculating that it reflects concerns over Apple’s growth trajectory. But many analysts are urging investors to stay calm, viewing the sale more as prudent profit-taking than a loss of faith. After all, Apple remains Berkshire’s largest single position, and its shares have soared nearly 900% since Buffett first took a bite in 2016 (BBG).

• Joe Gilbert of Integrity Asset Management called the move “merely about risk management,” noting that if Buffett had serious doubts, he would have exited completely.
• Cathy Seifert of CFRA Research pointed out to Fortune that Berkshire’s portfolio is still fairly concentrated in Apple even after the trim.

Apple’s AI Isn’t Quite Intelligent Yet

As Buffett was paring back, Apple was giving developers a peek at its much-hyped Apple Intelligence AI features. But based on the early preview, the company still has a lot of work to do to match the AI prowess of rivals like GoogleGOOG

and Samsung, according to Bloomberg’s Mark Gurman. Apple Intelligence will likely debut publicly around October, but only with limited capabilities at first. Major upgrades aren’t expected until 2025.

The initial beta includes basic capabilities like email summaries, smart search suggestions, and AI-generated photo memories. But it falls short of the game-changing innovations many had hoped for. Siri is getting a new look, but its intelligence isn’t significantly improving.

• More ambitious features like the ChatGPT integration, Image Playground for AI-generated images, and custom emoji creator won’t arrive until later this year or even 2025.
• Meanwhile, Google and Samsung already offer AI-powered features like live translation of phone calls, photo background editing, and the ability to search by circling objects on the screen.

Optimistic outlook: Apple Intelligence is only available on the iPhone 15 Pro, iPhone 15 Pro Max, and the upcoming iPhone 15 models — which could incentivize those who haven’t upgraded in recent years. The tech titan also returned to revenue growth in Q3, with sales up 5% and all product categories beating estimates. iPhone sales were flat but stable last quarter, a respectable result given the sluggish smartphone market. And while Apple refrained from giving specific Q4 guidance for hardware or iPhone revenues, the hype surrounding its AI features could give Apple enough momentum to finally push past its sales slump.