Forte: Apple still lags when it comes to capitalizing on artificial intelligence

Core Viewpoint - The company faces significant challenges, including geopolitical risks related to China and a lag in artificial intelligence (AI) advancements, which are critical for stock performance [1][9]. Earnings and Price Target - The company has guided for mid to high single-digit revenue growth for the September quarter, indicating expectations for the iPhone 17 lineup to perform well [3]. - The current price target is set at $21, based on a 28 times earnings multiple, which is considerably lower than the current trading price [4]. AI and Acquisition Strategy - There is skepticism regarding the company's ability to capitalize on AI, with a belief that an AI surprise is not yet priced into the stock [4]. - Historically, the company has not engaged in large acquisitions, preferring to acquire talent rather than companies that could significantly enhance its AI capabilities [5]. Product Development and Growth Potential - The potential introduction of a foldable device, such as a foldable iPhone, could serve as a new growth catalyst for the company [6][7]. - The iPhone Air is seen as a precursor to a foldable iPhone, suggesting that advancements in device form factors may be more critical than AI developments for future sales [7]. Geopolitical and Competitive Landscape - Ongoing tensions between the US and Chinese governments over tariffs and access to rare earth minerals pose risks to the company's operations, particularly in China, which accounts for about 10% of its revenue [9]. - Increased competition from Chinese smartphone manufacturers is impacting the company's market share in China [9]. Market Sentiment - The current stock price may reflect overly optimistic expectations, with too much good news already priced in [10].