Despite hopes that artificial intelligence features would drive iPhone 16 sales, Apple's latest smartphones continue to underperform compared with last year's models, a Wall Street analyst says. Still, Apple stock is near record high territory.
In a client note Wednesday, JPMorgan analyst Samik Chatterjee said U.S. sales of the iPhone 16 are tracking below the iPhone 15 so far. He cited a survey from Wave7 Research about handset sales across U.S. carriers in October and November.
"The survey highlights that the lower momentum, reflected in the lower market share year over year, is likely led by the (still) lower consumer awareness for Apple Intelligence," Chatterjee said.
Apple Intelligence is Apple's branding of AI features.
On the plus side, Apple is seeing a mix shift toward its higher-end models, especially the iPhone 16 Pro Max, he said.
Chatterjee rates Apple stock as overweight with a price target of 265.
On the stock market today, Apple stock fell 2.1% to close at 248.05. Earlier in the session, it notched a record high of 254.28.
Apple Stock Gets Price-Target Hike
"Awareness about Apple Intelligence remains low," Chatterjee said. "Based on a survey of carrier store representatives, 67% believe that iPhone users have low awareness of Apple Intelligence. Meanwhile, 24% indicated a 'medium' level of awareness, and only 10% reported a 'high' level of awareness among iPhone users."
Last week, Apple released its second batch of artificial intelligence features for newer iPhones and other Apple devices.
The new Apple Intelligence features include integration of OpenAI's generative AI chatbot ChatGPT with Apple's Siri digital assistant.
Elsewhere on Wall Street, Daiwa Securities raised its price target on Apple stock to 275 from 255 and kept its outperform rating.
Daiwa expects Apple Intelligence to spur iPhone upgrades, but mainly in the second half of 2025.
Meanwhile, Apple stock is on the IBD Tech Leaders list.
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