Bank of America lower Apple’s stock projection on Siri launch delays
Bank of America lowered its price target for Apple shares to $240 from $250
Quick overview
- Bank of America lowered its price target for Apple shares to $240, citing delays in AI rollout and increased supply chain costs.
- Despite the price target reduction, BofA maintained a Buy rating due to resilient earnings and improving gross margins.
- The delay in launching AI-enabled Siri is expected to impact iPhone upgrade demand, leading to a revised fiscal 2026 EPS estimate.
- BofA anticipates that upcoming product releases, including a smaller iPhone 'Air' and a foldable model, may boost demand.
Bank of America lowered its price target for Apple shares to $240 from $250, citing a delay in the company’s artificial intelligence rollout and increased supply chain costs related to tariffs.
BofA maintained its Buy rating, pointing to “resilient earnings, further improving gross margins, and strong capital return.”
In the note, BofA analysts emphasized the delays affecting the release of Siri, which are likely to impact the demand for iPhone upgrades.
“Apple’s launch of AI-enabled Siri has been delayed, which can cause further push out of iPhones upgrades,” analysts noted, which led BofA to adjust its fiscal 2026 EPS estimate to $7.82 from $8.20.
The Bank cited higher costs for navigating a more complex supply chain and delays in launching an AI-enabled Siri for lowering the long-term revenue forecast.
Revenue estimates for FY 2026 were revised from $450 billion to $440 billion. Concerns surrounding tariffs were another point of focus for the bank. While near-term demand for the iPhone may surge as consumers rush to purchase devices ahead of anticipated tariffs, BofA warns of a bleak outlook beyond the summer months.
The analysts stated that “tariffs create near-term volatility.” “The price target was updated using a slightly lower multiple of 29x 2026 earnings, as opposed to the previous 30x, to account for higher uncertainty around tariffs. ” However, BofA expects a tailwind from foreign exchange. The report stated, “Starting in the June quarter, we anticipate the weaker US dollar to help drive upside to revs and margins.”
Upcoming product releases may provide a boost, with Apple expected to release a smaller iPhone “Air” in September 2025 and a foldable model in September 2026. This form factor modification “should spur some form factor-based replacement demand,” according to BofA.
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