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<\/a><\/figure>\nFollowing Apple\u2019s WWDC keynote, shares dipped as investors seemed underwhelmed by the new AI announcements, including an upgraded Siri. However, Morgan Stanley analyst Erik Woodring argues the market is missing the bigger picture: Apple\u2019s AI requires significantly more powerful hardware (such as at least 12GB of unified memory), leaving roughly 1.3 billion existing iPhones unable to run the full suite of features.<\/p>\n
This hardware gap, combined with emerging \u201ckiller apps,\u201d is poised to accelerate upgrades and faster monetization than expected\u2014potentially reframing Apple as a clear AI winner and driving substantial upside for the stock.<\/p>\n
The latest artificial-intelligence updates unveiled by the company weren\u2019t enough to satisfy investors. But the negative market reaction is missing a massive opportunity looming on the horizon, according to Morgan Stanley analyst Erik Woodring.<\/p>\n
Christine Ji for MarketWatch<\/a>: Apple\u2019s revamped Siri could trigger a major upgrade cycle as users ditch their old iPhones for more powerful hardware, Woodring wrote in a Tuesday note. He maintained his overweight rating and increased his price target to $360 from $330. <\/p>\n Morgan Stanley estimated that 1.3 billion iPhones in circulation don\u2019t have the necessary hardware to run the updated Siri. Approximately 850 million iPhones can\u2019t run Apple Intelligence at all. The main constraint is memory, as the AI-powered Siri will require at least 12 gigabytes of unified memory to support advanced queries.<\/p>\n This sets the stage for a massive hardware upgrade cycle and an earlier-than-expected monetization opportunity. \u201cWith less backwards compatibility and clearer use cases, we see WWDC as a net positive,\u201d Woodring wrote.<\/p>\n Beyond Siri, Apple\u2019s Image Playground and Image Editing \u201care clear \u2018killer apps\u2019 that appear miles improved\u201d from previous versions, according to Woodring. Users can now generate images using natural language. They can also use the \u201cClean Up\u201d tool and spatial reframing capabilities to fix up pictures even if they were a bit too late to capture the perfect shot.<\/p>\n \u201cWe were especially impressed with the photo editing tools, which we expect will be heavily trafficked, and which are Apple\u2019s clearest near-term Services monetization opportunity,\u201d Woodring wrote. These features are only available for limited usage on current iPhones due to computing constraints, which will provide Apple with a powerful new monetization lever.<\/p>\n \u201cImage generation, photo editing and app intents will all be impacted by rate limits, forcing upgrades to iCloud (and potentially new iCloud tiers\/pricing) as soon as this fall,\u201d Woodring wrote. He said the new Apple Intelligence features could drive over 10% services growth and mid-teens product growth in 2027. <\/p>\n<\/blockquote>\n \u200e Apple has begun to monetize Apple Intelligence. This will be a very good thing for iCloud+ subscribers, Apple, and \u2013 when the market finally figures it out \u2013 AAPL investors.<\/em> \u2013 MacDailyNews, June 9, 2026<\/a><\/p>\n \u200e <\/p>\n <\/a>.<\/p>\n
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Yup.<\/p>\n
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