Goldman Sachs remains bullish on Apple Inc.
The stock reaction was broadly in line with last year's 2% drop after WWDC 2024 as muted artificial intelligence updates and a delayed Siri overhaul disappointed investors hoping for a generative AI leap.
Siri was mentioned just a handful of times in the keynote, a stark contrast to the 54 mentions during WWDC 2024. This omission fueled investor concerns over Apple's position in the generative AI race against Microsoft Corp.
Still, Goldman Sachs remains bullish, with analyst Michael Ng reiterating a Buy rating and a $253 price target, implying a 25.6% upside from Monday's close.
Goldman: Apple Ecosystem Still Delivers Value
While the lack of AI breakthroughs was widely noted, Apple focused WWDC25 on refining its operating systems across all platforms, introducing a new visual standard known as Liquid Glass. The UI overhaul brings translucent, adaptive elements to iOS 26, iPadOS 26, macOS 26, watchOS 26, and visionOS 26.
Apple Intelligence updates were also rolled out. These included real-time translation for Messages, FaceTime, and calls, enhanced image creation tools through Genmoji and Image Playground, and new Visual Intelligence features that allow on-screen content to trigger contextual actions like creating calendar events or tracking purchases.
Ng said the updates were "in line with low investor expectations" and emphasized Apple's ability to retain user engagement across its ecosystem even in the absence of headline-grabbing innovations.
"Though we recognize that design-centric OS updates may have been underwhelming amidst concerns about perceived lack of competitive AI feature innovation, we believe that Apple's focus on improving user experience across the Apple product ecosystem should continue to drive installed base stickiness," the analyst noted.
He added that the company's incremental software upgrades and design unification should position it well ahead of expected hardware refreshes, including foldable and ultra-thin iPhone models arriving between 2025 and 2027.
"We believe Apple continues to demonstrate best-in-class consumer hardware innovation with a growing foundation in Apple Intelligence," Ng said in his post-keynote report.
Ng highlighted the durability of Apple's installed base and its ability to monetize users through services.
He said these factors should "support Apple's premium multiple" and mark an inflection point in the company's Services business, which is expected to drive the majority of gross profit growth over the next five years.
Goldman forecasts fiscal 2025 revenue of $409 billion, up from $391 billion in 2024, and sees earnings per share rising from $7.16 in 2025 to $8.80 by 2027. The firm expects Apple's free cash flow yield to reach 4.8% by 2027, with valuation compression bringing its price-to-earnings ratio down to 22.9x.
