Apple’s AI Stumble: Why AAPL Stock Is the Weakest Link in Tech’s 2025 Rebound

The S&P 500 (SPY) has shaken off its early-year jitters. After falling nearly 19% between April and May, the index has now clawed its way back to even. The charge higher has been led, once again, by the tech elite: Microsoft (MSFT), Nvidia (NVDA), Meta (META), Alphabet (GOOG) (GOOGL), Amazon (AMZN), and Tesla (TSLA). Dubbed the “Magnificent Seven” alongside Apple (AAPL), these mega-cap names are driving the Nasdaq and cap-weighted S&P 500 higher, leaving smaller stocks in the dust.

But there’s one glaring exception: Apple.

While the other six have rebounded sharply thanks to strong Q1 earnings and bullish AI investment plans, Apple’s stock is still down nearly 19% year-to-date. It now ranks as the third-largest company by market capitalization, behind Microsoft and Nvidia. And its troubles go deeper than just price performance.

AI Ambitions, Delayed

Apple’s long-hyped AI upgrade to Siri, once a potential crown jewel, has become a symbol of its struggles. Internally dubbed a “reset,” the new AI-powered version of Siri promised to integrate across your calendar, mail, and messages. But repeated delays, software bugs, and underwhelming internal demos forced Apple to postpone the rollout, first from March to May quietly, and then indefinitely.

According to Bloomberg’s Mark Gurman, hundreds of bugs still plague the software. Engineers say features that were advertised just last year still don’t work. Ads were pulled. Morale dipped. And Apple, once a leader in personal tech, now risks being seen as an AI laggard.

Lawsuits, Tariffs, and a Frustrated White House

In early 2025, Apple paid out $95 million to settle two privacy lawsuits related to Siri’s unintended recordings. Then came new tariffs. With Donald Trump back in the White House, the administration has imposed sweeping import taxes on China-made electronics, putting direct pressure on Apple’s supply chain.

Apple has responded by shifting some iPhone production to India, aiming to produce all U.S.-bound phones there by 2026. But Trump isn’t pleased. “I’ve told Tim Cook, the iPhones sold in the U.S. should be made here,” he said in May, threatening a 25% tariff on devices not assembled in America.

To offset the pressure, Apple has pledged $500 billion in U.S. investment, including a server plant in Houston and a supplier training center in Michigan. But iPhones—its most critical product—remain mostly made overseas.

_{With new AI features delayed and hardware growth slowing, Apple is relying more on services like iCloud, the App Store, and subscriptions. Services are growing faster than products, making up a bigger share of the company’s revenue. Source: Main Street Data}

The Bigger Picture for Investors

Despite its current headwinds, Apple’s long-term fundamentals remain solid. It boasts over 2 billion active devices, strong free cash flow, and a growing services business. But in the eyes of many investors, it missed the starting gun in the AI race.

While rivals pour billions into GPUs and large language models, Apple is playing catch-up—now reportedly partnering with OpenAI to fill the gaps.

TipRanks data indicates a waning of analyst enthusiasm, characterized by fewer “Strong Buy” ratings, a decline in price target revisions, and cautious sentiment from both insiders and hedge funds.

The Magnificent Seven may be back in form, but Apple, for now, looks like the weakest link.

Is Apple Stock a Buy, Sell, or Hold?

Turning to Wall Street, Apple is considered a Moderate Buy, based on 29 analysts’ ratings. The average price target for AAPL stock is $228.22, suggesting a 12.27% upside.

See more AAPL analyst ratings