Needham downgrades Apple stock regarding AI competition and limited iPhone upgrade cycle
Apple (AAPL) stock was downgraded to Hold from Buy by Needham analysts identifying the Apple stock as overvalued during increased AI competition. Apple Intelligence, introduced with the iPhone 16, focuses on on-device AI processing for privacy and performance, integrating features with enhanced Siri. Apple’s on-device approach requires significant RAM (8GB minimum), which limits compatibility to newer models such as the iPhone 15 Pro and 16 series. The on-device AI demand excludes older iPhone users from accessing these features. Competitors using Cloud-Based AI, such as Google’s Gemini and OpenAI’s ChatGPT, run on cloud systems, enabling compatibility with older devices (as low as 2GB RAM). Apple may up their game here with new partnerships. Apple is rumored to begin collaboration with Google to integrate Gemini AI, and with Alibaba to navigate China’s regulations. Global Market Trends in 2024 show a drop in market share for Apple, dropping to 18% from 23% in 2023. Samsung held 34...