Barclays Reiterates Underweight Rating on Apple, $253 Price Target

Barclays analyst Tim Long reiterated an Underweight rating and $253.00 price target on Apple (NASDAQ: AAPL).

“We virtually attended the annual Worldwide Developers Conference today. Recall, it’s been roughly two years since the introduction of Apple Intelligence and Private Cloud Compute.

This year’s announcements focused on a revamped Apple Intelligence and new Siri AI, as well as platform improvements, and updates in trust and safety (with a focus on child safety features/ parental controls).

Updates felt more evolutionary vs revolutionary, and we continue to view AAPL as a laggard in AI with no killer apps and a questionable monetization strategy.

We also believe Apple Intelligence features that leverage some Apple apps that have lower market share (i.e. Apple Maps, Apple Music, Apple Home, etc) could limit adoption.

However, we did find AAPL’s utilization of customers’ data across its devices and apps to create a more helpful, contextualized AI Siri experience – potentially more compelling than current LLMs on the market (especially given AAPL’s continued focus on user privacy, even with AI features).

We could see a scenario in which the company’s ability to utilize all this data creates a more seamless, useful AI experience for customers vs existing LLMs.

The company’s continued focus on customer privacy that now extends into its use of AI could also potentially drive an upgrade cycle, as users become increasingly aware of other LLMs’ customer data usage.

Enhancements of existing design features remained more evolutionary.

Outside of AI data privacy highlights, updates around trust and safety this year focused on child safety/parental controls – a growing hot button global issue.

We view AAPL’s focus around this timely, and find some of the features introduced compelling, especially for users who are currently using thirdparty apps to manage parental controls.”

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