$Apple (AAPL.US)$ By the end of 2024, it approached historic highs, while more signs indicating that its products are disappointing emerged. Over the past few years, Apple's stock price has soared, yet Apple has repeatedly failed to achieve meaningful growth. Stone Fox Capital stated that they remain extremely bearish on Apple Stocks, noting signs that suggest Asia Vets does not possess the expected growth momentum.

Apple Intelligence fails.

A new survey shows that Apple Intelligence is important to iPhone users, but its initial features do not provide much value. 47.6% of iPhone users wish to have AI features, but in the SellCell survey, 73% of respondents are dissatisfied with the current Apple Intelligence options.

As initially suspected, users have become familiar with accessing ChatGPT and its AI features directly from OpenAI or Google (GOOGL.US). Apple will need tight AI integration to meet user needs, but by 2025, the iPhone has yet to deliver features that fulfill these demands.

The recently released iOS 18.2 adds some new features, such as Genmoji and ChatGPT integration. Apple Intelligence creates new emojis and integrates with existing generative AI services, but this product development does not seem to have prompted consumers to purchase more AI iPhones.

Open AI has generated over $0.3 billion in monthly revenue from high-performance users who pay for generative AI services. Apple's AI continues to lag behind, with the overall idea being that Edge Computing will eventually replace the current generative AI capabilities. However, the technology giant seems too slow to integrate AI features like ChatGPT, especially considering that the new features seemingly just direct users to ChatGPT.

Apple showcased its integration of ChatGPT, using it as a secondary source of knowledge for Siri, where certain questions are answered by Siri and others by ChatGPT. However, in iOS 18.2, you can start your Siri request with "Ask ChatGPT," and the assistant will automatically send the query directly to ChatGPT.

Irrational historical peak.

Despite the product failing again, Apple still set a historical high of $260 by the end of 2024. In the process, the stock's Market Cap nearly reached $4 trillion, whereas it first surpassed the $2 trillion valuation a few years ago.

During this period, Apple's stock price doubled when releasing several quarters' Earnings Reports. Since the growth of 8% in the fourth quarter of 2022 (September quarter 2022), this technology giant has had negative year-on-year growth in five of the next eight quarters.

In fact, revenue during this period was relatively flat or even declined. The rise in Apple's stock price was driven by the potential of AI, but entering 2025, Apple's "Apple AI" was disappointing.

iPhone revenue peaked at $205 billion in the 2022 fiscal year. Apple needs accelerated iPhone revenue growth to justify significant Business growth; otherwise, the growth of the service business will not be sufficient to drive Business growth.

In fiscal 2024, service business revenue grew by only $11 billion, reaching $96 billion. The service business grew by 13%, but the revenue growth rate was not enough to achieve the Analyst forecast of over 6% growth.

Apple is expected to achieve revenue of $414 billion in fiscal 2025, an increase of $23 billion year-on-year. About half of the growth will come from historical services, with the rest from iPhone or Apple AI-related businesses.

JPMorgan analysts have indicated that the sales momentum of the iPhone 16 has weakened before December. The main issue is clearly the low awareness of Apple AI among people, and the latest data does not support the expectation that interest in AI iPhones will increase in the future.

Despite these AI issues, analysts like those at Wedbush Securities still believe that the stock's price should be much higher. Recently, Wedbush raised the Target Price for Apple to a Wall Street high of $325, and to reach this target, Apple's Market Cap must approach nearly $5 trillion.

However, the Apple stock price reaching $260 has already excited people about AI opportunities. From now on, a larger upward potential will require this technology giant to introduce some new products that go beyond the hype of AI.

Apple Vision Pro remains a huge disappointment. This tech giant's MR device captures only 5% of the VR/MR market share and is expected to sell nearly 10 million units by 2025.

Apple is now eager to testify in the DOJ's case against Google. Apple has Google Search set as the default Search Engine for the Safari browser, earning $20 billion from it every year, and this income could disappear.

The issue here is that Apple's stock price is 34 times the EPS target for fiscal year 2025. Apple is now more expensive than other technology giants, all of which are expected to grow at a rate of over 10%, typically twice the growth rate of Apple. Although Microsoft (MSFT.US) has directly invested in OpenAI, its price is slightly lower. Google and Meta Platforms have already integrated AI into their own platforms to increase usage and boost advertising revenue.

Editor/new