Apple's Siri AI Was Finally Announced, So Why Is the Stock Tanking?

Key Points

• Apple briefly notched a record high of $317 on June 8 after the Siri AI announcement at WWDC, before reversing sharply.
• The selloff appeared to reflect investor disappointment that the reveal, while significant, means Apple is still catching up to rivals rather than leapfrogging them.
• Analysts have been reiterating bullish ratings and price targets well above current levels, suggesting the initial reaction may present an opportunity.

Apple Inc. NASDAQ: AAPL started the week with an almost-perfect setup. Multiple quarters of solid results, a market that’s been steadily repricing the stock higher on AI optimism, and bullish expectations for what would be announced at its annual Worldwide Developers Conference (WWDC), which is running June 8-12.

The stock started well, too, briefly hitting a fresh all-time intraday high of $317 on June 8 after Apple announced its new Siri AI. It looked, for a moment, like a fitting reward for investors who had held through a turbulent start to the year and backed the thesis that Apple's ecosystem advantage would eventually translate into AI relevance.

However, almost immediately, the stock started giving up those gains.

The obvious question is whether the market got this one right or badly wrong. A company announces a long-awaited, genuinely significant AI product upgrade, and the stock falls nearly 2% in response. That's the kind of reaction that either reflects sharp-eyed investors correctly identifying a disappointment or an overreaction that opens up a buying opportunity.

While the initial optics aren’t great and support the former, there are reasons to think the latter will eventually play out.

What Apple Actually Announced

The Siri AI reveal at WWDC was genuinely eye-opening, even if the stock’s overall reaction on the day didn't reflect that. The new Siri is more capable and more conversational than anything Apple has offered before, and in the company’s own words, is “a profoundly more capable and personal assistant.”

It can handle complex multi-step requests, pull in on-device context like messages and photos, work with Visual Intelligence to understand the physical world through the camera, and maintain conversations seamlessly across iPhone, iPad, Mac, and Apple Watch.

With Amazon.com Inc. NASDAQ: AMZN recently announcing its own AI update for Alexa, Apple responded with a noteworthy update to its own voice assistant. At first glance, it looked like they had achieved a milestone, but then the stock began to fall.

Why Apple Stock Sold Off

In terms of why sentiment swung so hard against the stock, it looks like the market saw the Siri AI update as confirmation that Apple is still closing the AI gap rather than having definitively closed it.

For context, Siri AI won't launch until later this year, and even then, it will only be a beta launch in English in the United States. Other languages and regions, including key markets like the EU and China, will follow only after further regulatory engagement.

That timeline isn’t exactly aggressive for a company that first promised a more personalized Siri at WWDC 2024. The fact that Apple will also have to pay Alphabet Inc NASDAQ: GOOGL billions of dollars over the coming years to help power Siri through Google’s Gemini model didn’t help, as it only served to underscore that Apple still lacks a fully independent AI model of its own.

For investors who had been pricing in a more decisive leap forward, the reveal felt more like a confirmation of continued progress than a step-change moment. In a market where AI announcements are being judged against a bar that’s continually raised by OpenAI’s ChatGPT or Anthropic’s Claude, simply being a bit more capable and conversational clearly isn’t enough to get investors excited.

Why the Selloff May Be a Mistake

However, there’s a chance that that’s just short-term thinking, because even while the stock was falling, Evercore and Sanford Bernstein both reiterated their Outperform ratings. These followed similarly bullish moves from Wedbush, Citigroup, and Morgan Stanley earlier this month.

Wedbush's fresh $400 price target is particularly hard to dismiss, as it implies there’s close to 30% in additional upside to be had from current levels.

The bull case doesn’t actually depend on Siri being the best AI assistant in the market right now. It depends on Apple owning the trusted endpoint through which hundreds of millions of users will eventually interact with AI, regardless of which underlying model powers it.

The installed base of active devices, the control over identity, payments, and app access, and the deepening ecosystem stickiness that Siri AI will accelerate over time are the arguments that justify a premium multiple, and the June 10 announcement undermined none of them.

In fact, the Gemini partnership and the on-device model improvements arguably reinforce the platform argument rather than weakening it.

In that context, the selloff looks like a classic case of the market reacting to what was announced rather than what it means. For investors with a time horizon beyond the next few weeks, this dip may be a serious buying opportunity.