Apple Stock: AI Glasses?

Apple's AI Ambitions

Apple and innovation have historically been linked. However, the company has been noticeably quiet in the quickly evolving field of artificial intelligence. While competitors have been developing AI-driven devices and LLM integrations, Apple has relied on partners like OpenAI. Now, Apple is planning to enter the smart glasses market, with a potential launch of AI-enabled eyewear by 2026.

These glasses may have cameras, microphones, speakers, and Siri integration, intending to rival Meta’s Ray-Ban smart glasses and Google’s Android XR devices. These developments are interesting for Apple, which is trying to catch up in the AI sector. The question is whether these glasses will help the company regain its leading position, potentially attracting investors.

Financial Overview

Apple, based in California, has a market capitalization of $2.99 trillion. The company's product line includes the iPhone, iPad, and Mac, and its services sector is growing. AAPL stock has decreased by 20% YTD in 2025. Trade tensions and potential tariffs are pressuring Apple to reorganize its global manufacturing. Investor confidence has been affected by regulatory issues and increased competition.

Fiscal Performance

Apple's fiscal second quarter of 2025 showed positive results. On May 1, the company reported $95.4 billion in revenue, a 5% increase year over year, and a net income of $24.8 billion. Earnings per share rose 8% to $1.65, surpassing Wall Street expectations by 2.5%. CEO Tim Cook mentioned strong demand for the iPhone 16e and new Mac and iPad models, all using Apple’s silicon. Services like Apple TV+, Music, and the App Store, generated $26.6 billion. iPhone sales were $46.8 billion, while Mac and iPad sales were $8 billion and $6.4 billion, respectively. The Wearables segment contributed $7.5 billion.
The quarter concluded with $24 billion in operating cash flow, and $29 billion was returned to shareholders.

While records were achieved in India, Brazil, and the U.K., Wall Street showed concern. Shares declined due to worries about a $900 million impact from U.S. tariffs in the June quarter and a 2.3% drop in China sales to $16 billion. Cook addressed tariff concerns by mentioning Apple’s production shift, with more iPhones now made in India and more hardware assembled in Vietnam. Apple is also expanding its presence with new retail locations in India, Saudi Arabia, and the UAE.

Analyst Projections and AI Strategy

Analysts are optimistic, forecasting an EPS of around $7.11 for fiscal 2025, a 5.3% increase year over year, and a further rise of 7.9% annually to $7.67 in fiscal 2026. Apple is now pursuing its own AI path, developing AI-powered smart glasses with specialized low-power chips, inspired by Apple Watch processors, to manage cameras and AI functions.

Apple’s smart glasses represent a move into AI wearables, with the goal of strengthening its ecosystem and boosting revenue. While Meta and Google are already involved in this market, Apple's design and chip technology could allow it to gain market share. AAPL stock has a consensus rating of “Moderate Buy”.

Among 37 analysts, 18 recommend a “Strong Buy,” four suggest a “Moderate Buy,” 12 advise a “Hold” rating, one has a “Moderate Sell” rating, and two have a “Strong Sell” rating. The average analyst price target for AAPL is $231.02, suggesting a potential upside of 15.5%. The high target price of $300 indicates a possible rally of up to 50%.