The worst is likely over for now for Apple stock, although long-term risks remain, a Wall Street analyst says.
Jefferies analyst Edison Lee late Tuesday upgraded Apple stock to hold, or neutral, from underperform, or sell. He also raised his price target to 188.32 from 170.62.
On the stock market today, Apple stock rose 2.2% to close at 212.44.
A "good" fiscal third-quarter report "could keep the stock stable near term," Lee said in a client note. Apple's June-quarter revenue and earnings should benefit from tariff-driven pull-in demand and smartphone share recovery in China, he said.
But smartphone demand in the second half of calendar 2025 likely will be muted by a lack of new features for the upcoming iPhone 17, he said.
"Our supply chain checks indicate the target production volume of iPhone 17 in second-half 2025 will likely be flat year over year," Lee said. "But we believe the sales could be at risk since there remains a lack of new features, and AI is not yet a game changer."
Plus, the rumored thin-model iPhone 17 might prove unattractive to consumers because of its lower battery capacity, single camera and higher relative price, Lee said.
Meanwhile, Apple reportedly has changed course with the artificial intelligence strategy related to its Siri digital assistant.
The Cupertino, Calif.-based company is considering partnering with OpenAI or Anthropic to power its new Siri and sidelining its own in-house AI models, Bloomberg reported.
Apple Stock In Consolidation Pattern
"It's becoming increasingly clear to Apple that it can't deliver an AI-powered Siri on its own and will need to rely on third parties for the underlying LLM (large language model)," Deepwater Asset Management analysts Gene Munster and Brian Baker said in a blog post.
The AI-upgraded Siri is due out in spring 2026, a year later than originally planned.
Another option for Apple is to acquire Perplexity, Munster and Baker said.
"This makes the most sense given its strategic alignment with Apple's direction and the fact that it would allow the company to maintain full control of its AI product roadmap," they said.
Apple stock is deep in a 27-week consolidation pattern with a buy point of 260.10, according to IBD MarketSurge charts.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
