Apple Has Watched AI From the Stands Says Dan Ives

Summary

Dan Ives, Wedbush's Global Head of Technology Research, discusses Apple's strong holiday quarter, especially China iPhone demand and services, and why the stock reaction disappointed him. He argues Apple should be up 5-8% after results and needs to articulate a credible AI playbook, with the Google Gemini partnership potentially building into a subscription service that could help drive the stock toward $325-$350. He also flags memory-cost and 3nm supply margin risks but expects iPhone 18 price increases to offset them.

• Apple's China segment generated $25.5 billion in sales, up 38%, driven by iPhone 17 demand.
• Dan Ives calls the muted stock reaction a head scratcher and says shares should be up 5-8%.
• Apple has lagged mega-cap tech peers in AI; the Google Gemini partnership is seen as a first step.
• A potential Apple AI subscription service is not priced into the stock, according to Ives.
• The path to $325-$350 requires Apple to lay out an AI strategy and playbook.
• The $1.4 billion tariff headwind is likely in the rearview mirror as US-China tensions ease.
• Rising memory prices and 3nm supply constraints may pressure margins.
• iPhone 18 price increases of about $150 could offset those cost pressures.