Barclays fails to see ’major progress’ on AI for Apple

Published 29/07/2025, 14:40
© Reuters

Investing.com -- Barclays said it remains cautious on Apple (NASDAQ:AAPL), flagging limited traction on artificial intelligence and lingering risks around tariffs, China, and regulation.

In a note to clients, Barclays (LON:BARC) said it expects “a slight June-Q beat led by better FX, iPhone and Mac upside,” helped by tariff-related pull-in. 

The firm is modeling Services growth of around 11% year-over-year. However, it warned that the second half of 2025 “remains [a] potential drop off” due to a pull-in reversal and ongoing macro headwinds.

Barclays maintained its underweight rating, writing, “We still see no major progress on AI for AAPL.” 

Referring to Apple’s announcements at its annual developer event, Barclays said it was “underwhelmed with the AI feature announcements, viewing them as more evolutionary than revolutionary.” 

It added, “The reception of Apple Intelligence has also been disappointing.”

According to Barclays, Apple’s “longer-term AI strategy remains muddy,” especially when compared with other major tech players. 

The firm noted Apple’s “asset-light approach to AI… relying on the benefits of its ecosystem,” but questioned whether that would be enough to drive an upgrade cycle or meaningful services growth.

On tariffs, Barclays highlighted a complex outlook: “2H GM remains a wildcard with lack of clarity on tariffs and mitigation efforts.” 

Apple said most iPhones sold in the U.S. this quarter will be made in India, while nearly all iPads, Macs, Watches, and AirPods will ship from Vietnam.

“We expect AAPL could adopt other mitigation efforts… before it would turn to pricing actions,” Barclays said, adding that such pricing changes would “erode demand.”

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