Many investors have soured on this former market darling, but that may be a “go” sign for new buyers in light of its quiet and underappreciated progress on the AI front.
He may be slated to step down as Berkshire Hathaway‘s CEO and chief stock-picking guru at the end of this year. The fact remains, however, that Warren Buffett is still Warren Buffett, and his picks are still Warren Buffett picks — you could certainly do worse than borrowing a few of his ideas for your own portfolio.
And one of his major holdings looks particularly promising for the foreseeable future. That’s Apple (AAPL 0.60%). Indeed, this once must-have ticker could go parabolic before the end of this year, and then keep rising as it so often has.
Image source: Getty Images.
A rough AI start has taken a toll on the stock
Surprised? It would be a little surprising if you weren’t. Anyone keeping tabs on this stock likely knows that not only has it underperformed the market since late last year, but that it’s actually down 15% year to date versus the S&P 500‘s respectable 6% gain.
Tariff-related troubles aside, that result can mostly be blamed on the company’s unimpressive foray into the artificial intelligence arena. Interest in its newer AI-capable smartphones has been modest, crimped by a new-and-improved version of its Siri digital assistant that isn’t actually new or improved. Apple’s facing a class action lawsuit for arguably overstating the pace and depth of Siri’s progress, in fact.
The company’s biggest headache right now, however, is also its biggest opportunity.
Yes, in a very un-Apple-like manner, Apple dropped the ball on the artificial intelligence front. While the AI-capable processors found within the iPhone 16 (and newer) introduced in September of last year, along with some higher-end versions of the iPhone 15, are up to the task, the Apple Intelligence software that makes the most of this hardware isn’t. That’s why iPhone sales haven’t grown as expected — as measured by revenue as well as units sold — compared to this time last year. Indeed, iPhone sales haven’t meaningfully grown at all since October, shortly after the iPhone 16 became available.
Data sources: iPhone revenue from Apple. iPhone unit sales from IDC. Chart by author.
Meanwhile, UBS reports that according to its latest survey on the topic, consumers’ intent to purchase an iPhone now stands at a five-year low.
The thing is, there’s nothing more motivating to a for-profit corporation than the fear of a failure that could knock it off of a pedestal.
Apple is making progress on artificial intelligence
Getting straight to the point, Apple has finally figured out how to make its AI efforts matter to consumers.
You might not recognize that from a quick glance at its recent work. Last month’s Worldwide Developers Conference, which saw the unveiling of a handful of new artificial intelligence features, was a strangely ho-hum event that failed to excite investors — or, seemingly, the developers themselves.
Don’t mistake hesitation for disinterest, though. A handful of subtle game-changers were introduced at 2025’s WWDC.
Case in point: In conjunction with a close-up look at the newest version of Apple Intelligence, the company also introduced what it’s calling the Foundation Models framework. This developer-oriented offering is something of a departure for Apple in that it gives developers’ apps direct access to the on-device language model that serves as the heart of Apple Intelligence.
And this is no small matter. As IBM principal research scientist Kaoutar El Maghraoui commented, “Giving the developers access to Apple’s AI models, being able to basically play with these models, fine-tune them — I think that that’s really powerful.” More to the point, this new approach allows app developers to get more functionality out of newer iPhones, taking some of the pressure off Apple to do so.
Other new AI tools introduced at June’s developer conference include a feature called Visual Intelligence that turns an iPhone’s camera into an information-gathering tool, and Workout Buddy, which provides real-time physical fitness guidance based on the user’s fitness history.
All the bad is already priced in
There’s still more to be done, to be clear. Namely, Siri is still conspicuously missing some features it was supposed to have by now. Apple Senior VP of Software Engineering Craig Federighi explained during June’s conference that “we’re continuing our work to deliver the features that make Siri even more personal. This work needed more time to reach our high-quality bar, and we look forward to sharing more about it in the coming year.”
Translation: The company’s still regrouping after removing John Giannandrea from the role of Siri chief by shifting the Siri portfolio to the desk of Apple Vision Pro lead Mike Rockwell in March — no small disruption. As it stands now, the new AI-enhanced version of Siri won’t be launching until next year.
As the old adage reminds us, though, things happen when you least expect them to.
Even if most investors aren’t allowing themselves to see or believe it, Apple’s AI ambitions are coming to fruition. It’s just happening slowly and gradually rather than with the sorts of splashy unveilings that investors have come to expect from the company.
But what about the tariff threats, or the fact that Berkshire has been shrinking its stake in Apple of late? The conglomerate has pared its position in the tech giant back by roughly two-thirds since 2019.
Keep those sales in their proper perspective: Apple is still Berkshire Hathaway’s single-biggest equity holding, making up more than 20% of its stock portfolio. This speaks volumes about what Buffett and his lieutenants think of its future despite the threat of tariffs.
Or, think about it like this. All the doubt and pessimism currently surrounding Apple? It could be the ideal contrarian buy signal for the stock, rooted in the idea that things are already as bad as they’re going to get. Viewed from that perspective, the most likely direction for the stock from here is up.
Just be patient if that’s your thinking. While Apple may be primed for a parabolic move upward, investors can have no real clarity yet as to exactly when that move might start.