As Apple’s stock trades down double digits since the start of the year, market onlookers are hoping its next earnings call will show strength and dispel doubts about Tim Cook’s leadership.
“Apple now needs a product-focused CEO, not one centered on logistics. Apple has ‘pulled the string’ on too many product categories, only to see them fall short of meaningful scale, or fail to materialize entirely,” wrote LightShed analysts Walter Piecyk and Joe Galone. “But AI is not something that Apple can merely ‘pull the string’ on. Missing on AI could fundamentally alter the company’s long-term trajectory and ability to grow at all.”
The analysts’ comments come in the wake of Apple’s annual WWDC, which Wedbush analyst Dan Ives called “a snoozer” which barely mentioned AI. The LightShed analysts noted that it would be kind to say Apple overpromised and underdelivered on its AI promises from last year to this year.
“Apple was nowhere with AI then, and little has changed since,” the note read.
Apple did not immediately respond to Fortune’s request for comment.
Other market onlookers, including Melissa Otto, the head of research at S&P Global Visible Alpha, say the company’s upcoming earnings on July 31, are Apple’s chance to demonstrate a turnaround.
If Apple is no longer going to deliver the same kind of growth investors have been used to in its core devices business, it will need to show the potential of another category.
The question now, said Otto, is whether Apple can take advantage of the high-margin services business to really drive revenue growth.
“I think if they can continue to outpace expectations around the services business, we may start to see additional incremental positive sentiment come into the stock; however, if they don’t, that does leave a lot of open questions about what’s next for them,” Otto told Fortune.
