Apple Stock’s Upside May Be Limited as AI Agents Could Disrupt Business

Apple stock has risen 35% since March 30. There might not be much more near-term upside for the shares, say analysts. (Dan Kitwood/Getty Images)

Key Points

• Morgan Stanley analyst Erik Woodring loweres his Apple stock price target to $355 from $360.
• The analyst cites a lack of clear catalysts to move shares higher and the rising threat of artificial-intelligence consumer agents.
• Wall Street warns that AI agents from Meta Platforms and OpenAI could disrupt Apple’s App Store, search and services economics.

Apple stock might be hitting a wall without a clear catalyst to meaningfully move shares higher and the rising threat of artificial-intelligence consumer agents potentially disrupting the iPhone maker’s app store and services businesses.

That’s the view at least from Morgan Stanley analyst Erik Woodring, who lowered his Apple stock price target to $355 from $360 on Thursday. The fresh price target represents 6.6% upside from Apple’s closing price of $333.02 from Wednesday.

“Apple’s product roadmap remains amongst the most exciting in over a decade, but our earnings outlook changes little following the iPhone launch, leaving limited upside to our price target after a strong last six month run,” Woodring said in a research note.

Apple stock fell 0.2% to $332.53 in premarket trading on Thursday after ending Wednesday up 5.1%. Shares have risen 35% as of Wednesday since closing at $246.63 on March 30. The stock has gained 23% this year.

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Along with the solid stock performance this year and status quo earnings expectations, Apple also is facing a looming threat from AI consumer agents from Meta Platforms and OpenAI.

“We continue to monitor emerging risks from alternative marketplaces, changing developer economics, and the rise of agentic AI platforms, which could eventually disrupt App Store and Search economics by shifting app discovery, distribution, and transactions away from Apple’s ecosystem,” Woodring said.

The analyst added that while the risk “remains early and consumer adoption uncertain,” the rapid adoption of AI consumer agents is reason to increase the pressure on Apple’s Siri AI efforts.

Woodring isn’t alone in his belief that AI agents could be an issue for Apple.

Bank of America analyst Wamsi Mohan recently noted that adoption of Meta Platforms’ Muse agent could lead to reduced revenue from Apple’s services segment as consumers use the AI agent to start and end transactions, online searches, and other activities.

Mohan also believes that the success of Apple’s Siri is of growing in importance for the company.

This risk remains in the early stages and it’s not as if there’s anything necessarily wrong with Apple’s business growth. It simply means the stock might have some trouble moving significantly higher in the near term.

“The stock already reflects what we view as a peak multiple without a corresponding change in our earnings forecast, while Apple’s long-term services monetization increasingly becomes a debate as third-party agentic workflows emerge,” Woodring said.

Write to Kit Norton at kit.norton@barrons.com

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