Key Takeaways

• Apple unveiled the new iPhone 16, the company’s first phone designed for Apple Intelligence, on Monday.

• Apple stock has historically underperformed the market on iPhone launch days, a trend that continued Monday.

• Analysts believe the AI-powered iPhone 16 could drive a big upgrade cycle.

Apple (AAPL) shares fell following the unveiling of the iPhone 16, Apple Watch Series 10 and AirPods 4.

Shares of the tech titan’s stock were down less than 1% following the much-anticipated “It’s Glowtime” event, slipping as the benchmark S&P 500 rose about 1%. Apple’s shares have fallen in recent days alongside other tech shares, though they’re up more than 10% this year.

Historically, Apple’s stock price has tended to underperform the market on the day of an iPhone launch event, Morgan Stanley analysts wrote. Growth should come “as the introduction of the iPhone 16 and Apple Intelligence helps to unlock pent-up demand,” the analysts said.

Apple’s AI-Powered Upgrade Cycle Could Be its Biggest

Shares could rose if the first iPhone designed specifically with Apple Intelligence in mind ushers in “Cupertino’s biggest upgrade cycle in its history,” as analysts at Wedbush predicted over the weekend.

Globally, about 300 million iPhones have not been upgraded in more than four years, which Wedbush says could mean more than 240 million iPhone units sold in fiscal 2025.

Eleven of 16 analysts surveyed by Visible Alpha have a Buy rating for Apple, with an average price target of just over $244. That’s a 10% premium over Friday’s closing price.

Read the original article on Investopedia.