• Evercore ISI (EVR) raises Apple's price target to $325 from $300, maintaining an Outperform rating based on AI-driven growth potential.
  • The firm anticipates a major Siri 2.0 relaunch in early 2026, powered by Google (GOOG)'s Gemini, with multimodal capabilities and enhanced on-device AI.
  • Apple's strategy includes optional access to third-party LLMs like ChatGPT, creating potential AI-as-a-Service revenue streams and accelerating device upgrade cycles.

A Strategic AI Bet on Apple's Future

Evercore ISI has increased its price target for Apple Inc. to $325, up from $300, according to analyst Amit Daryanani, who argues that the company's upcoming AI initiatives—particularly a comprehensive Siri overhaul—could serve as a significant catalyst for growth. This move comes as Apple navigates slowing hardware sales and increasing reliance on its high-margin Services segment, with investors seeking clarity on what might sustain the stock's recent three-month rally.

Internal sources familiar with Apple's development timeline indicate that the company is targeting a standalone event in March 2026 to unveil Siri 2.0, which would be integrated with iOS 26.4 or 26.5. This revamped assistant is expected to "lean on" Google's Gemini for cloud-based AI processing while boosting on-device capabilities, enabling more natural multimodal interactions across text, voice, and images. "What institutional investors are really focused on is execution stability," one source noted, pointing to past delays that have heightened scrutiny over Apple's AI readiness.

Tim Cook recently reaffirmed that Apple Intelligence-enhanced features remain on track for a 2026 debut, despite reports from outlets like Bloomberg and MacRumors detailing internal challenges and staff concerns about Siri's preparedness. These sources suggest a phased rollout, with initial features in spring 2026 and further upgrades in iOS 27 later that year. The push aligns with broader industry trends, as competitors like Microsoft (MSFT) and Google aggressively monetize generative AI through cloud services and consumer products.

Monetization and Market Implications

Evercore highlights that Apple plans to offer users optional access to larger AI models such as ChatGPT or Gemini, which could open up long-term monetization opportunities through AI-as-a-Service models. This approach might not only drive faster device upgrades—as consumers seek AI-capable iPhones, iPads, and Macs—but also expand services average revenue per user (ARPU) via subscription-based or usage-based AI features. Analysts view this as critical for reigniting growth amid mature smartphone demand.

Regulatory and privacy considerations loom large, with Apple positioning its AI architecture around on-device processing and privacy-preserving designs to comply with stringent rules like the EU's GDPR. Reports indicate that upcoming iOS updates will bring formal Apple Intelligence support to China, marking a geopolitical milestone given prior restrictions on foreign AI features there. However, deep integrations with third-party LLMs could attract antitrust scrutiny, especially around default settings and data routing under frameworks like the Digital Markets Act.

Investor reaction has been cautiously optimistic, with the price target hike reflecting strong institutional interest in AI as Apple's next growth leg. Yet, internal readiness concerns inject a note of execution risk, as the company aims to close the gap with rivals that have been more aggressive in generative AI. If successful, Apple could build a recurring AI revenue stream layered atop its hardware base, similar to how iCloud and Apple Music expanded earlier ecosystems. Failure, however, might widen the competitive divide and pressure Apple's ecosystem advantage.

Correction: An earlier version misstated the timeline for Siri 2.0 features; they are expected in iOS 26.4 or 26.5, not exclusively in a single release.