Apple delivered a solid March quarter and guided June revenue 7% above expectations. The stock reaction, up 4%, was muted relative to the guide, which reflects a concern that the June quarter is the last quarter of the latest iPhone supercycle, longtime Apple analyst Gene Munster writes. The good news is the Street is already reflecting a slowdown in iPhone in FY27 to 6% growth from an average of 20% from Sep-25 through June-26. The bigger question is, can Apple Intelligence, starting in the form of a new Siri, which rolls out later this year, break the iPhone supercycle narrative and drive incremental revenue starting next year? Munster believes it can. If successful, Munster believes that will likely rerate AAPL’s multiple.
Gene Munster for GeneMunster.com:
Apple’s March quarter was objectively solid in the face of high expectations… The bigger surprise was guidance. Apple guided June revenue growth to 14% to 17%…
I believe that guidance was strong enough to justify the stock being up closer to 10%. Instead, shares are up about 4%. That disconnect points to investor concern about what’s next…
Apple has been in an iPhone super cycle over the past five quarters… The question is whether Apple can do more to step up growth between the cycles…
Apple has been working for more than two years to deliver a more capable Siri and Apple Intelligence features that are must-have. They have shifted the focus to “this year” with the new Siri. This comes down to a question: if Apple can show that personalized AI creates new use cases inside the iPhone, the current 6% growth expectation for next year will prove too low. If they fail, it is likely to land around that 6% growth rate.
At the highest level, I believe the Apple personalized AI opportunity remains underappreciated, given they are one of the few companies with the hardware, software, silicon, privacy policies, and distribution to make it mainstream…
Apple makes the world’s best consumer technology products, and AI gives the company a chance to make those products more useful. The opportunity is to build the world’s first must-have consumer AI devices that are anchored in personalized AI. Whether that is new iPhone features, unlocking the power of what developers can build, or eventually new products like smart pens or smart glasses to drive the next leg of growth.
MacDailyNews Take: Out little birdies keep singing the same song: Apple’s new LLM Siri will prove to be worth the wait!
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