Apple supply devalued by Jefferies, which states ‘major AI’ mobile phones are 2 years away

Apple (AAPL) was snubbed by investment company Jefferies (JEF) lateSunday Jefferies expert Edison Lee devalued Apple supply from Buy to Hold, pointing out worries over filled with air assumptions for its brand-new AI-enabled apples iphone.

Lee stated smart device equipment is not yet progressed sufficient to suit the sort of modern expert system experts and apple iphone customers are wishing for.

“Near-term expectations for iPhone 16 and even 17 are too high,” Lee wrote in a note to investors Sunday night.

Big Tech companies have raced to innovate generative artificial intelligence technologies and secure their footing in an AI-dominated market. Up until this summer, Wall Street worried if Apple could catch up to rivals such as Google (GOOG) and Microsoft (MSFT), which rushed to release new AI chatbots and chips, while Apple CEO Tim Cook remained elusive about the iPhone maker’s AI plans. Now that Apple set into motion its AI vision with the upcoming release of Apple Intelligence, its next hurdle — like its competitors — is proving that it can monetize those artificial intelligence plans.

Apple stock fell 0.9% Monday morning.

“Unlike AI servers, smartphones lack high-speed memory and advanced packaging tech that allow fast data transfer between AP and memory, thus limiting their AI capabilities,” Lee stated, including, “To expect an accelerated smartphone replacement cycle now due to AI is premature, in our view.”

Lee stated that it will certainly take a couple of even more years for producers like Apple to develop smart device equipment that can running expert system software application efficiently.

Apple revealed its collection of expert system devices, called Apple Intelligence, at its Worldwide Developer Conference inJune Apple’s long-awaited AI launching, along with its disclose of a collaboration with OpenAI, enhanced the supply to tape highs. It greater than relieved financier worries over Apple’s battery of trouble previously in the year– from struggling iPhone sales and layoffs to clashes with antitrust regulators at home andabroad Bank of America (BAC) expert Wamsi Mohan anticipated a future in which Apple’s AI-enabled “intelliphones” dominate the market.

But Apple’s initial launch of its iPhone 16, equipped with hardware to run its Apple Intelligence features that begin rolling out this month, has so far disappointed Wall Street. Analysts say demand for Apple’s latest smartphone is weaker than it was after past iPhone launches, citing shipping times as a metric. While both new and existing Apple customers are looking to buy the iPhone 16 for its faster connectivity, fewer cited Apple’s upcoming AI features as a motivating factor, according to JPMorgan’s (< figcaption course= "caption-collapse caption-credit

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To be sure, Lee said Apple is well positioned to lead the AI smartphone market in the future. Lee said Apple “is the only hardware-software integrated player that can leverage proprietary data to offer low-cost, personalized AI services.”

“We believe AAPL is the leader in mobile AI tech, and its chip-OS-AI integrated ecosystem puts it far ahead of the fragmented Android competition.”

Some 65% of Wall Street analysts covering Apple recommend buying the stock and see shares rising around 9% to nearly $245 over the next 12 months. Lee expects the stock to drop about 6% to $213.