I’ve got to be honest with you. After watching Apple’s big AI reveal at WWDC, a part of me felt… underwhelmed. My friends and I were all hyped, expecting some kind of reality-bending demo that would leave our jaws on the floor. Instead, we got AI-generated emojis (Genmoji), writing polishers, and a slightly smarter Siri. It felt like Apple brought a nicely polished spork to a sci-fi laser battle.
We’re seeing competitors launch AI that can practically write a movie script or hold a full-blown conversation. And Apple’s big play was… summarizing my emails? It’s easy to look at that and think they’ve lost their magic. But then I came across an analysis from Gene Munster at Deepwater Asset Management, and it completely flipped my perspective. What if this seemingly “boring” start is actually a calculated, 4D chess move? What if Apple is quietly building a two-stage rocket for a massive comeback, and we’re all just looking at the launchpad?
It turns out, there are two huge potential catalysts brewing under the surface, and they’re hiding in plain sight.
🧠 The AI Low-Bar Game: A Genius “Sandbag”
First, let’s talk about AI. Munster’s biggest point is that Apple has masterfully, and intentionally, “reset the bar.” They essentially stood on stage and told the world, “Hey, don’t expect anything revolutionary from our AI for about a year.”
At first, that sounds like a massive failure. But think about it. The AI space right now is a chaotic pressure cooker. Companies are rushing to push out features, and it’s led to some seriously embarrassing public stumbles. We’ve seen AI chatbots confidently invent fake legal cases or tell users to put glue on their pizza. That kind of mistake would be absolutely catastrophic for Apple, a company whose entire brand is built on polished, seamless, and trustworthy experiences.
So what did Apple do? They’re playing the long game. By setting expectations incredibly low for the next 12 months, they’ve given themselves breathing room. They get to avoid the frantic race to release half-baked features and instead focus on what they do best: integration and user experience.
This low bar is a gift for the stock. Any small win, any feature that works slightly better than expected, will feel like a huge victory. Instead of struggling to meet sky-high expectations, they can consistently deliver pleasant surprises, which investors absolutely love.
More importantly, their approach to “Apple Intelligence” is fundamentally different.
- It’s Personal: It’s not about knowing everything in the world; it’s about knowing your world. It can cross-reference your calendar, emails, and messages to do actually useful things, like finding that podcast your friend sent you last week.
- It’s Private: This is the game-changer. Most of the processing happens right on your device. For more complex tasks, it uses “Private Cloud Compute,” but Apple has been crystal clear that they can’t see your data and it’s never stored. In an age of data leaks and privacy concerns, this is a massive selling point.
- It’s the Setup: All of this is just the foundation. The real payoff is the completely rebuilt Siri coming next year. The Siri we have now is the punchline to a joke. The Siri they’re building is meant to be the central, intelligent hub of your entire digital life. And when that lands, the low expectations of today will make its arrival feel like an earthquake.
📱 The iPhone Slingshot Effect
Now for the second catalyst, which is tied directly to the first: the iPhone. Munster points out something fascinating. Over the last six months, Wall Street’s expectations for iPhone growth have totally cratered.
Think about it like this. Imagine you told your boss you’d probably only increase sales by 1% this year. It’s a low target. But then, you hit 3% or 4%. Suddenly, you’re not just meeting expectations; you’re a hero! You’ve crushed it. That’s what’s happening with Apple stock right now.
Let’s look at the numbers Munster mentioned:
- Original 2024 Growth Forecast: 6%
- New 2024 Growth Forecast: A measly 1%
- Original 2025 Growth Forecast: 8%
- New 2025 Growth Forecast: A much lower 4%
When the bar is that low, it becomes much, much easier to jump over. Munster calls this the simple “block and tackle” of Apple’s business. People are committed to the ecosystem. They have the photos, the apps, the blue bubbles. They are going to upgrade their phones eventually. With expectations this low, even a normal, predictable upgrade cycle could look like a huge win and send the stock soaring.
But here’s the real kicker that connects everything together: the AI is the catalyst for the next iPhone “supercycle.”
For years, the reason to upgrade your iPhone has been incremental, a slightly better camera, a faster chip, or a new color. It’s nice, but it’s not a must-have. True, game-changing Apple Intelligence, however, will almost certainly require the newest, most powerful chips to run effectively on-device. Suddenly, the iPhone 17 or 18 isn’t just a minor spec bump. It’s the key that unlocks a genuinely new, smarter, and more helpful experience. That’s how you get tens of millions of people to upgrade.
🚀 The Two-Stage Rocket Explained
So, when you put these two pieces together, you see the brilliant strategy unfolding. It’s a two-stage rocket designed for a massive launch in late 2025.
- Stage 1 (Now to Mid-2025): The Low-Expectation Win. Apple’s stock can climb simply by beating the dirt-low expectations for iPhone sales. The loyal user base will do what it always does, upgrade, and Wall Street will be pleasantly surprised. Meanwhile, the AI bar is so low that any small improvements will be celebrated.
- Stage 2 (Late 2025 & Beyond): The AI Supercycle. This is the main engine firing. The truly revolutionary Siri and deeper Apple Intelligence features launch, but they require new hardware. This triggers a massive wave of iPhone upgrades, creating a growth story that blows the current dismal forecasts out of the water. It reignites growth and reminds everyone why Apple dominates.
🚧 But What About the Problems?
Of course, it’s not all sunshine and rainbows. The article correctly points out some serious headwinds Apple is facing:
- Revenue in China is falling.
- The Vision Pro is amazing tech, but its $3,500 price tag is a tough sell against a $500 Meta Quest.
- The Wearables and Home segment has been weak, with the HomePod struggling to compete.
These are real challenges. But here’s the thing: everyone knows about them. These fears are already “priced in” to the stock. The market has already punished Apple for these weaknesses. What the market is underestimating, according to this thesis, is the power of the two-stage rocket. A truly smart Siri could make the HomePod an essential device. A killer AI experience could give the Vision Pro a purpose that transcends gaming and justifies its price.
So while everyone is focused on the Q3 sales numbers in China, Apple is quietly building the foundation for a story that will define 2025 and 2026. They’re letting everyone else burn out in the AI hype race while they prepare for the marathon.
It’s a contrarian view, for sure. But it’s the kind of long-term strategic thinking that has defined Apple for decades. I went from feeling underwhelmed to being incredibly excited about what’s next. What do you think? Is Apple playing 4D chess, or are they just falling behind?
- The China Challenge: Beyond the recent sales decline, which accounts for about 15% of total revenue, Apple recently agreed to a $490 million settlement. The lawsuit alleged the company misled investors about the strength of iPhone demand in China back in 2018-2019.
- AI Strategy and Siri: A key element of Apple’s future AI narrative is the anticipated revamp of Siri, expected by spring 2026. Analyst Gene Munster has also suggested that Apple could bolster its AI capabilities, particularly in search, by acquiring a company like Perplexity.
- Beyond the iPhone: Apple is also facing pressure in its Wearables, Home, and Accessories segment. This includes increasing competition for the Vision Pro and weaker performance from products like the HomePod.
- Diverging Analyst Views: While Munster is cautiously optimistic, not all fund managers agree. For instance, the Columbia Seligman Global Technology Fund maintained an underweight position on Apple in Q1 2025, citing concerns over AI delays and mounting regulatory pressure.