Apple Inc. AAPL shares may not rise very much when the tech giant debuts the iPhone 16 on Monday because much of the anticipation is already baked into the stock, but the new phone should give some legs to the stock over the next year, according to a tech expert.
“I think the announcement is typically going to be a disappointment,” Deepwater Asset Management managing partner Gene Munster told Benzinga on Tuesday.
“I don’t expect it to trade up on the event.”
Munster’s expectation is the shares will start rising considerably after the company reports its third-quarter earnings in late October because consumers and investors will have had time to explore the iPhone’s expected artificial intelligence features, he said.
“I think they’re really gonna catch on,” Munster said.
“Once that starts happening into next year, that’s when the excitement really goes, but this is going to be the disappointment before the excitement. I think this year is really going to be a great 12 months for Apple.”
Read Also: Apple’s App Store Revenue Surge and iPhone Upgrades Set to Drive Growth in 2025: BofA Analyst
Sales for iPhone may grow as much as 15% next year versus Wall Street expectations of 7% because the iPhone 16 may convince 10% of iPhone users who planned on upgrading in 2026 to do so next year, he said.
“I think it’s conservative to say 10% because there’s a group that’s just going upgrade this year because it’s time. Their phone is five years old they’re just gonna get a new phone.”
The higher revenue will move the stock higher, Munster said, but he declined to predict a number.
The question is how many users who initially planned to upgrade in 2026, 2027 and 2028 will go for the iPhone 16 in 2025 as a result of the new AI features, Munster said.
“These pools are so massive that just a small increase in that uptake has a measurable impact on revenue growth,” he said.
“I think the bottom line is if the AI features are as exciting as I believe, they’re going to have a massive wave of upgrades.”
Munster recalled iPhone sales growing 52% 10 years ago when the iPhone 6 came out with a bigger screen.
“Small changes to features can have big impact to growth,” he said.
“That’s the key question. Do you think these features are going to spur big upgrade cycle?”
AAPL Price Action: Apple lost 2.72% in Tuesday’s session, closing at $222.77. Exchange-traded funds that hold the stock performed as follows:
- T-Rex 2X Long Apple Daily Target ETF AAPX fell 5.17%.
- Direxion Daily AAPL Bull 2X Shares AAPU dropped 5.53%.
- Fidelity MSCI Information Technology Index ETF FTEC declined 4.32%.
- Vanguard Information Technology ETF VGT slipped 4.4%.
- IShares U.S. Technology ETF IYW fell 4.18%.
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Gene Munster of Deepwater Asset Management. Courtesy photo.
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