Apple, Inc. AAPL shares have barely budged to the Glowtime hardware launch event held on Sept. 9, and a portfolio manager on Tuesday offered “Mea Culpa” for his short-term stance on the stock.

What Happened: Very early indications point to a nearly 10% year-over-year decline in the sales of the iPhone 16, the newest iteration of Apple’s flagship product, said portfolio manager and founder of Niles Investment Management Dan Niles. This is in contrast to expectations that the addition of the artificial intelligence features will drive 10% sales growth, he said.

Quoting famous American researcher, scientist and futurist Roy Amara’s law, Nile said, “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”

The portfolio manager noted that Apple’s price/earnings multiple calculated on calendar year 2024 earnings expanded from 24 times to 31 times, primarily on AI expectations. “It is hard to argue for valuation support at current levels,” he said.

While noting that “a crucial trait for successful investing is admitting when you are wrong and moving on,” Nile said. “I think I am wrong in the short run but have a feeling that I will be back in the long run.”

Ahead of the Apple event, Niles had said this time around Apple stock could go against the grain on the launch day. He based his expectation on Apple supplier Hon Hai Precision Industry Co., Ltd. HNHPF reporting 33% year-over-year revenue growth for August, which was the highest quarterly growth for the company of the year.

“While historically $AAPL product launches are sell the news events, this AI-focused event on 9/9 has a chance to buck the trend,” he had said then.

Read Next: No ‘Razzle-Dazzle’ With Latest iPhone, But Apple Wowed With These 2 ‘Glowtime’ Announcements, Says Gurman

AI Undeniable Prop: Nile said Apple Intelligence will be a pulling point for consumers. “I believe consumers will want AI functionality available to them 24/7 and the smartphone is the one piece of technology that we have with us all the time.”

Weighing in on the early softness, the strategist said with the staggered rollout of AI across geographies, AI features will be available to consumers in China, a key market, only in 2025.

He also noted that the promotion of the new phones by the U.S. wireless carriers is not much different than last year.

Niles’ views echo that of tech venture capitalist Gene Munster. In a recent note, he said he expects iPhone revenue to rise 15% in fiscal year 2025, more than double the 7% growth the Street currently models. Munster sees growth accelerating slightly to 17% in the next fiscal compared to the Street forecast of 8% growth.

“The most significant factor in my estimate is my belief that 8% of the iPhone installed base will upgrade early in FY25, and 14% in FY26,” he had said. The tech specialist, however, sees a slowdown to 5% each in fiscal years 2027 and 2028.

In premarket trading on Wednesday, Apple shares fell 0.44% to $215.83, according to Benzinga Pro data. The stock has added 13% for the year-to-date period, underperforming the 19% gain for the SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the S&P 500 Index.

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