Apple Faces Challenges: AI Delays and Tariff Pressures Impact Stock Outlook

Bank of America cuts Apple price target on tariff hit, delayed AI rollout

The longer-term outlook for Apple looks increasingly difficult to navigate, according to Bank of America. The bank cut its price target to $240 per share from $250 ahead of the company's fiscal second quarter earnings report due out May 1. The firm's new forecast calls for 17% upside from Tuesday's close. "We slightly increase our revenue estimates for the March and June quarters, while we lower our revenue estimates further out to adjust for higher costs of navigating a more complex supply chain and for delays in launching an AI enabled Siri," analyst Wamsi Mohan wrote on Thursday, reiterating his b The analyst's updated revenue forecasts revenue assume that consumers will rush to stores to beat pending tariffs. Longer-term, he expects the trend to fall off. AAPL YTD mountain Apple stock in 2025. Apple stock has plummeted more than 18% in 2025, outpacing the S & P 500's 9% decline. The company has been under pressure due to President Donald Trump's "reciprocal" tariffs, which largely take aim at China with a 145% duty on imports from Beijing. Apple manufactures key products like the iPhone in China. The company has also delayed the rollout of Apple Intelligence, its take on AI, several times. The rollout was initially expected alongside the launch of the iPhone 16 lineup in the fall of last year. The analyst said that "AI still remains a problem" for Apple, and he cut his 2026 full-year estimates as a result of the delay. For 2025, the Mohan now forecasts full-year earnings per share of $7.25 on revenue of $412 billion. That's down from $7.30 and $411 billion. For 2026, Mohan expects revenue of $440 billion and $7.82 per share, down from $450 billion and $8.20. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Apple AI Delays, Rising Cost Pressures Trigger Price Target Cut From Bank Of America - Apple (NASDAQ:AAPL)

Fears of looming tariffs are driving iPhone buyers to act early, likely fueling near-term sales for Apple Inc. AAPL. Yet, behind the revenue bump, rising supply chain costs threaten to trim the Cupertino, California-based tech giant's margins. In a note released Thursday, Bank of America analyst Wamsi Mohan trimmed the company's 12-month price target from $250 to $240, while keeping a Buy rating, citing tariff-driven cost pressures and delays in launching key artificial intelligence features. See Also: US Treasury Hits Record $15 Billion In Customs And Excise Tax Haul Amid Trump's Trade Policies Tariffs Pull Demand Forward But Add Long-Term Strain According to Mohan, fears of import tariffs may have triggered a pull-forward in iPhone demand, giving Apple's upcoming March and June quarters a short-term revenue tailwind. The firm slightly raised its 2025 revenue estimate to $412 billion, up from $411 billion. However, the boost comes at a cost. Mohan lowered his 2026 revenue forecast to $440 billion, down from $450 billion, citing higher logistics and supply chain costs that could crimp margins later in the year. "We only include higher supply chain costs and not the impact of reciprocal tariffs," Mohan said, implying more downsides could arise if geopolitical conditions deteriorate. Delays In AI Rollout Weigh On iPhone Upgrade Cycle The firm also cut Apple's earnings per share (EPS) projections, with 2025 EPS now expected at $7.25, down from $7.30, and 2026 EPS trimmed to $7.82 from $8.20. Much of this adjustment stems from delays in launching AI-enabled Siri, a flagship feature that was expected to drive new iPhone upgrades. The lag has prompted Bank of America to lower unit estimates for future iPhone cycles, as consumers potentially wait for more advanced features before upgrading. Mohan noted that China may see AI iPhones earlier through local partnerships, and two major hardware updates -- a slimmer "iPhone Air" in September 2025 and a foldable iPhone in 2026 -- could support form factor-driven replacement demand. FX And Services Offer Cushion Amid Uncertainty Bank of America sees upside from foreign exchange tailwinds, with a weaker U.S. dollar expected to boost both revenue and margins starting in the June quarter, though near-term hedging may dampen the full effect. The report also cited Apple's Services business as a reliable growth engine. With strong demand in subscription-based offerings like iCloud, Apple Music and the App Store, the segment continues to deliver high-margin recurring revenue that helps insulate overall earnings. On the hardware side, while wearables may face softer demand due to economic sensitivity, Mohan expects iPhone and Mac sales to remain resilient, calling these segments more "inelastic" amid broader macro headwinds. Market Reaction Shares of Apple traded 0.6% higher to $206 on Thursday, though the stock remains nearly 8% below its pre-tariff announcement level on April 2. Since hitting record highs in late December 2024, shares have fallen 22%. Now Read: Americans Rush To Buy Cars Ahead Of Tariff Price Hikes, Fed Beige Book Shows Image: Shutterstock AAPLApple Inc$205.990.68%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum68.17Growth45.08Quality84.49Value8.03Price TrendShortMediumLongOverviewGot Questions? AskHow will Apple's tariffs impact iPhone sales?Which tech companies could face similar cost pressures?What opportunities exist in AI technology due to delays?How might foreign exchange fluctuations benefit Apple's margins?Which services sectors could thrive with Apple's growth?Are there investment opportunities in subscription services?What impact will rising supply chain costs have on tech stocks?How could consumer behavior shift due to AI delays?Which hardware manufacturers might benefit from Apple's innovations?What long-term strategies can investors adopt amidst these changes?Powered ByMarket News and Data brought to you by Benzinga APIs

Apple stock target cut at BofA on AI delays By Investing.com

Investing.com -- Bank of America has lowered its price target for Apple shares (NASDAQ:AAPL) to $240 from $250, citing delays in the company's artificial intelligence rollout and rising supply chain costs tied to tariff uncertainty. Despite the reduced target, BofA maintained its Buy rating, pointing to "resilient earnings, improving gross margins and strong capital return." In a note to clients, BofA analysts flagged setbacks in the release of Apple's AI-enabled Siri, which could weigh on iPhone upgrade demand. "Apple's launch of an AI-enabled Siri has been delayed and can cause a further pushout of iPhones upgrades," analysts wrote. As a result, BofA trimmed its fiscal 2026 earnings per share estimate to $7.82 from $8.20. The bank also cut its longer-term revenue forecast, citing "higher costs of navigating a more complex supply chain and for delays in launching an AI enabled Siri." Fiscal 2026 revenue estimates were lowered to $440 billion from $450 billion. Tariff concerns were another source of caution, according to the bank. While near-term iPhone demand could benefit from consumers pulling forward purchases to avoid potential tariffs, BofA warned of a murkier outlook beyond the summer. "Tariffs create near-term volatility," the analysts said. The price target was revised based on a slightly lower multiple of 29x 2026 earnings, down from 30x previously, to reflect "higher uncertainty around tariffs." Still, BofA expects foreign exchange to be a tailwind. "We expect the weaker US Dollar to help drive upside to revs and margins starting in the June quarter," the note said. Future product launches could offer a boost, with Apple expected to debut a thinner iPhone "Air" in September 2025 and a foldable model in September 2026. BofA said these form factor changes "should spur some form factor based replacement demand."