Apple reports quarterly earnings after the bell today, and Wall Street's walking a tightrope. Analysts are tempering expectations for the iPhone maker's near-term numbers while betting big that its next-generation iPhone and revamped Siri could ignite a stock rally by year's end. The split sentiment reveals how much is riding on Apple's AI strategy as the company navigates a challenging upgrade cycle heading into what could be its most important product launch in years.
Apple is about to give investors a reality check. The company reports its first quarter earnings tonight, and the narrative coming from Wall Street's top analysts is surprisingly bifurcated - caution now, optimism later.
The immediate outlook is anything but rosy. Analysts surveyed by CNBC are bracing for underwhelming iPhone sales and services revenue that may fall short of the street's loftier projections. It's a familiar pattern for Apple in recent quarters - the company's been stuck in a holding pattern as consumers wait for more compelling reasons to upgrade their devices.
But here's where it gets interesting. Those same analysts who are pumping the brakes on Q1 expectations are quietly loading up on bullish calls for the second half of 2026. The catalyst? Apple's long-awaited AI transformation, specifically a completely overhauled Siri and the next iPhone lineup that will showcase these capabilities.
The timing matters. Apple's been conspicuously late to the generative AI party compared to Microsoft, Google, and Meta, all of which have been aggressively pushing AI features into their products. While competitors rushed to market with chatbots and AI assistants, Apple took its characteristic measured approach - frustrating investors but potentially setting up for a more polished debut.
Today's earnings call will be scrutinized for any hints about what CEO Tim Cook and his team are planning. Investors want to know if Apple's AI investments are translating into actual consumer demand or if they're just expensive R&D projects. The iPhone remains Apple's cash cow, accounting for roughly half of total revenue, so any signal about upgrade momentum carries enormous weight.
