Apple needs to make Apple Intelligence more compelling.
Investment firm TD Cowen believes Apple has until the end of 2026 to make Apple Intelligence compelling, and in the meantime will see moderate earnings growth plus the launch of folding devices.
A year after it raised its Apple target price on Apple Intelligence and increasing China sales, TD Cowen now sees the same factors taking longer to improve. But it maintains its most recent target price of $275 and recommends that investors buy shares.
In a pair of notes to investors seen by AppleInsiderthe company’s analysts have been commenting ahead of Apple’s next earnings call on July 31, 2025. This is the first quarterly earnings report since the full impact of Trump’s ever-changing tariffs policy has been in effect.
According to TD Cowen, Apple had more iPhones manufactured as part of its work to mitigate against the tariffs. The analysts presume that there will be a continued build up of inventory into the next quarter as Apple prepares for the expected semiconductor tariff, which TD Cowen estimates will be 25%.
But this is all about bringing orders forward rather than increasing them. So the company believes that the latest June 2025 quarter will have seen 48 million iPhones manufactured, instead of its predicted 43 million.
Taken across the whole 2025, though, TD Cowen believes that iPhone shipments have continued to be broadly seasonal. It sees the September quarter showing 54 million iPhones instead of the predicted 50 million, but 2025 as a whole to stay as expected on 223 million in total.
That figure is a rise of 4% year over year — compared to a decline of 3% in the calendar year before — rather than a significant rise. That’s specifically because of declining sales in China, but also because of what the firm describes as an incomplete AI strategy.
TD Cowen notes that Google is now expected to launch its Pixel 10 on August 20 with AI features that it presumes Apple will need to match. These AI issues will continue into the next two quarters, the company estimates, with no particular uplift to the current iPhone 16 or forthcoming iPhone 17 range coming from Apple Intelligence.
Nonetheless, TD Cowen does believe that Apple has 18 months to make Apple Intelligence a compelling feature. Before that period is up, the analysts expect that Apple will launch at least one folding device.
iPhone Fold and perhaps iPad Fold are coming
According to TD Cowen, an iPhone 18 Fold will be released in September 2026, and Apple is expecting to sell between 7 million and 10 million of them. The company agrees with previous reports that the iPhone Fold will have a single hinge, but believes that the screen size has not yet been decided.
Despite recent rumors, TD Cowen believes an iPad Fold is still coming
TD Cowen also disagrees with the most recent reports saying that Apple has abandoned its plans for an iPad Fold. While not going so far as to say there definitely will be one, the analysts are nonetheless saying that Apple is estimating sales of an iPad Fold to be between 5 million and 6 million.
Apple earnings and shares to the end of 2026
In the shorter term, the analysts report that Apple is believed to be aiming to produce over 50 million iPhones in India — but that currently it looks more like it will achieve only 40 million. That information is said to come from TD Cowen’s supply chain contacts, which say that overall Apple’s iPhone orders remain stable.
Similar sources say that at the same time, Samsung has been increasing its orders. And both Xiaomi and Oppo have been reducing theirs because of lower than expected demand.
For the rest of Apple’s range, the analysts predict that Apple will report that its iPad, Mac, and wearables will be down low single digits for the June quarter. But it will then rise by mid-single digits for the September quarter.
TD Cowen says that tighter consumer budgets are affecting most device sales. It also cites a high price and a lack of consumer use cases for Apple making 60,000 of the Apple Vision Pro instead of 350,000 of them over the same period in 2024.
Services will continue to play a strong part in Apple’s overall earnings, though, with growth predicted to be more than 11% for the current quarter. The analysts predict that growth will continue around that figure to the end of 2025.
So none of Apple’s various revenue streams are expected to dramatically improve in the foreseeable future, yet overall TD Cowen is optimistic about it. That fits with the similar predictions from both JP Morgan and, before it, Morgan Stanley.
