JP Morgan thinks AI won't come until 2025's iPhone 17 Pro

Investment firm JP Morgan predicts that Apple will introduce AI with the 2025 iPhone 17 Pro, and has dropped its current price target to $210 partly as a result.

JP Morgan trimmed its Apple price target from $225 to $215 in February 2024, citing declining iPhone demand in China. Part of the new drop to $210, announced in a note seen by AppleInsider, is around the best time to get back into Apple stock ahead of the expected AI iPhone.

The investment firm thinks that the addition of AI features resembles when Apple introduced 5G to the iPhone. That prompted more upgrades because of 5G's clear speed benefits, and that drove up the share price.

Tracking that price starting with 2019 when rumors of 5G grew stronger, and on past its launch with the iPhone 12 range in 2020, the analysts say that valuation peaked in the first half of 2021. While 5G had more immediately obvious benefits than AI, the analysts predict a similar cycle.

JP Morgan says that hedge fund investors are particularly interested in the AI upgrade, but also that there is doubt over when that will actually happen. While Apple has been clear that iOS 18 will introduce AI features later in 2024, it's only a presumption that the year's iPhone 16 Pro will have any AI-related hardware upgrades.

"In our view, we expect the upgrade cycle to be driven by iPhone 17 [in 2025]," says the analysts' note. Specifically, they expect to see increased RAM and Neural Processing Units in September 2025, and also "broader awareness of potential AI use cases" by then.

JP Morgan thinks it's unlikely that Apple or smartphone rivals will introduce more than a limited AI-related hardware updates in 2024.

Alongside a lack of an AI-based iPhone 16 Pro, JP Morgan predicts lower demand for Macs and iPads, and it also questions Apple's Services growth.

Overall, it expects a risk to Services because of ongoing regulatory issues such as those over the App Store and Apple Music. However, it believes those issues will take some time to resolve, and will "play out beyond the AI upgrade issue."

Separately, Wedbush has maintained its $250 Apple price target, in part because of its expectation that there is pent-up demand for an AI iPhone 16 Pro.

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25 Comments

ajmas 560 comments · 22 Years

About 8 months ago

Just banking on AI without a real purpose is crazy. Good AI is invisible and solves real problems. Bad AI is just making the non-technical Wall Street people happy, through gimmicky functionality, without doing anything really useful. Of course there is another class of AI, but it’s hard to know from the outside whether it is AI or algorithm.

puiz666 26 comments · 7 Years

JP Morgan: "We don't really understand AI or where it is going. We don't know when and what Apple will be doing with AI, but it will be probably late, although we really don't know what that means because nobody else has done anything meaningful with AI in smartphones. So: sell, sell, sell!" I don't get why anyone would listen to these clows.

rob53 3312 comments · 13 Years

puiz666 said:

JP Morgan: "We don't really understand AI or where it is going. We don't know when and what Apple will be doing with AI, but it will be probably late, although we really don't know what that means because nobody else has done anything meaningful with AI in smartphones. So: sell, sell, sell!" I don't get why anyone would listen to these clows.

I’ve always wondered why financial institutions think they know anything about technology, especially anything Apple makes. The majority of them are required to use Windows PCs because they are locked into Windows server software. Apple products are for creative people not number crunchers who are never creative. 😉

Massiveattack87 102 comments · New User

rob53 said:

puiz666 said:

JP Morgan: "We don't really understand AI or where it is going. We don't know when and what Apple will be doing with AI, but it will be probably late, although we really don't know what that means because nobody else has done anything meaningful with AI in smartphones. So: sell, sell, sell!" I don't get why anyone would listen to these clows.

I’ve always wondered why financial institutions think they know anything about technology, especially anything Apple makes. The majority of them are required to use Windows PCs because they are locked into Windows server software. Apple products are for creative people not number crunchers who are never creative. 😉

They don´t need to understand technology as long as they understand their financial performance.

I wonder how they come to the conclusion that first AI-integrated phone will be iPhone 17.

But will their AI strategy boost their sales and lead to a big cycle? Will iOS18 cover all AI features from iPhone 16 (In that case, JPM would be wrong)?

What added values do we get from WWDC 2024 when some features will not be rolled out with iPhone 16? We should wait till September 2025?
Others (Huawei or Samsung with Google would be way ahead in terms of their AI features).

I still wonder that JPM maintains their target price at $210, which is way too high given their weak guidance and weak financial performance.

ITGUYINSD 550 comments · 5 Years

Massiveattack87 said:

rob53 said:

puiz666 said:

JP Morgan: "We don't really understand AI or where it is going. We don't know when and what Apple will be doing with AI, but it will be probably late, although we really don't know what that means because nobody else has done anything meaningful with AI in smartphones. So: sell, sell, sell!" I don't get why anyone would listen to these clows.

I’ve always wondered why financial institutions think they know anything about technology, especially anything Apple makes. The majority of them are required to use Windows PCs because they are locked into Windows server software. Apple products are for creative people not number crunchers who are never creative. 😉

They don´t need to understand technology as long as they understand their financial performance.

I wonder how they come to the conclusion that first AI-integrated phone will be iPhone 17.

But will their AI strategy boost their sales and lead to a big cycle? Will iOS18 cover all AI features from iPhone 16 (In that case, JPM would be wrong)?

What added values do we get from WWDC 2024 when some features will not be rolled out with iPhone 16? We should wait till September 2025?
Others (Huawei or Samsung with Google would be way ahead in terms of their AI features).

I still wonder that JPM maintains their target price at $210, which is way too high given their weak guidance and weak financial performance.

Based on historical data that says it takes Apple 2-3 generations to come out with the same technology as everyone else, all in the name of "getting it right" (and sometimes they do and sometimes (Siri) they don't).