Gene Munster Says Apple Stock's Tepid Reaction To Strong Earnings Beat Comes Down To One Thing: Investors Want More AI Substance

Core Viewpoint - Apple Inc. reported strong financial results but saw minimal stock movement due to investor skepticism regarding the impact of artificial intelligence on future growth [1][4]. Financial Performance - Apple reported fiscal first-quarter revenue of $143.76 billion, exceeding Wall Street expectations of $138.42 billion, with earnings of $2.84 per share, surpassing estimates of $2.66 [2]. - Revenue increased by 16% year over year, while earnings rose by 19% [2]. Guidance and Market Reaction - The company provided stronger-than-expected guidance, forecasting March-quarter revenue growth of 13% to 16% and gross margins of 48% to 49% [3]. - Despite these positive indicators, Apple shares gained less than 1% in after-hours trading [3]. Investor Sentiment - Investor skepticism is attributed to a lack of clear evidence on how AI will significantly impact Apple's business, rather than dissatisfaction with financial performance [4]. - Customers are reportedly satisfied and continue to upgrade devices, but investors are looking for clearer AI milestones [5][8]. AI Strategy and Expectations - The muted stock reaction is linked to the credibility gap created by Apple's previous AI announcements, which raised expectations that were not met [6]. - CEO Tim Cook provided limited updates on AI during the earnings call, mentioning a revamped Siri powered by Apple Intelligence would arrive "this year" without further details [7]. Regional Performance - A notable rebound in China revenue was reported, increasing by 38% year over year, alongside growth in Apple's installed base, which now exceeds 2.5 billion active devices [8].