Analyst Explains 'The Problem' With Apple (AAPL)

We recently published 10 AI Analyst Calls You Should Pay Attention To. Apple Inc (NASDAQ:AAPL) is one of the stocks analysts were recently talking about.

Daniel Newman, The Futurum Group CEO, said in a recent program on Schwab Network that things are “tough” for Apple because the market might not be excited to invest in the stock despite its new iPhone 17.

“I think the problem with Apple Inc (NASDAQ:AAPL) is that everything that’s showing up today is in fact pretty incremental. Yes, the phone is thinner and yes, it looks great. We haven’t had a big super cycle in four years. We were sort of told that, hey, Apple Inc (NASDAQ:AAPL) intelligence last year was going to drive this big cycle. It didn’t really accomplish that. Now we’ve got the thinnest phone ever, longest battery, does that drive a super cycle? And of course, we’re waiting for price because we want to know, do these phones slightly longer battery, slightly nicer screen, maybe a bit more durable, are people going to run out and buy them? And if they’re going to charge more, if tariffs are going to start to impact, that may be a problem, too. So, I think it’s a tough position. The announcements have been good, but I think with everything Nvidia is doing and everything Google’s doing right now, it’s hard for that investor to say, ‘I want to put a dollar here into Apple.'”

Early indicators point to a strong consumer response to the latest iPhone 17. However, can this enthusiasm lift the stock in the long term, especially when the company is falling behind in the AI race?

Apple Inc (NASDAQ:AAPL) can only do so much in innovation to revolutionize its iPhone each year. A UBS survey shows that the iPhone upgrade cycle has reached 35 months in the US. A separate report from Consumer Intelligence Research Partners says about 63% of iPhone users keep their smartphones for more than two years. Apple Inc (NASDAQ:AAPL) is losing its pricing edge as it has to put a cap on its price tags to compete in key markets like China. Samsung, Xiaomi and other companies can launch advanced hardware and software features to compete with Apple Inc (NASDAQ:AAPL) and keep the company under pressure in Asia.

Macquarie Core Equity Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its second quarter 2025 investor letter:

“Apple Inc. (NASDAQ:AAPL) declined in the quarter and meaningfully underperformed the S&P 500. The security contributed to relative performance due to our underweighting, approximately 50% lower than the benchmark weight. While Apple continues to have laudable attributes and strong repurchase intent, the company is failing to grow at historical rates given the maturation of many key products.”

While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.