Apple Inc. (NASDAQ:AAPL) shares climbed 3.9% to $305.81 in late-morning trading on Thursday, July 2, adding approximately $168 billion to its market capitalization. The move pushed the stock above UBS's $296 price target, yet fresh survey data suggests the much-hyped AI upgrade cycle may be failing to materialize, leaving analysts questioning the sustainability of the rally.
The gains stood in stark contrast to the broader market. The Invesco QQQ Trust (NASDAQ:QQQ) slipped 0.8%, while the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) edged up just 0.2%. Apple's surge brought it back toward its June highs, but the divergence from the tech-heavy QQQ underscores the stock-specific nature of the move.
UBS Survey Raises Doubts on AI-Driven Upgrades
UBS analyst David Vogt noted in a report Thursday that only about 24% of survey respondents now say they would upgrade their iPhone sooner due to Apple Intelligence features—a drop of 500 basis points from the prior six months. Meanwhile, roughly 31% reported the new features have no impact on their upgrade plans, up 300 basis points. In China, iPhone purchase intent slipped to around 15%, and the average iPhone age in the installed base remains elevated at about 22.9 months.
Vogt maintained his September quarter and full-year iPhone forecasts unchanged and kept a $296 price target on Apple, which equates to 30 times his 2027 EPS estimate of $9.86. With shares now trading above that level, the stock offers limited margin for error.
Limited Upside to Average Target
According to FactSet data cited by MarketWatch, the average analyst price target for Apple stands at $317.39 from 52 analysts, with the stock still rated "Overweight." At $305.81, the shares are just 3.8% below that average target—a thin cushion that leaves little room for disappointment. The stock's rally on Thursday erased nearly half the distance from its Wednesday close of $294.38 to the $317.39 consensus estimate.
Market Context and Macro Data
The broader market saw mixed action on Thursday. Nvidia Corp. (NASDAQ:NVDA) fell 0.6%, Meta Platforms Inc. (NASDAQ:META) dropped 3.6%, and Tesla Inc. (NASDAQ:TSLA) sank 6.8%. Microsoft Corp. (NASDAQ:MSFT) and Amazon.com Inc. (NASDAQ:AMZN) both posted gains but trailed Apple's performance. Alphabet Inc. (NASDAQ:GOOGL) was little changed.
Risk appetite was supported by softer-than-expected jobs data. Reuters reported that U.S. payrolls rose by just 57,000 in June, well below the 110,000 forecast, while the unemployment rate held at 4.2%. Florian Ielpo, head of macro at Lombard Odier Investment Managers, called the data a "beautiful number," noting the job market remains stable. eToro U.S. analyst Bret Kenwell said the report "doesn't scream labor-market trouble" but "cools the narrative a bit."
Regulatory Developments
Regulatory pressures continue to mount. On June 30, the UK's Competition and Markets Authority (CMA) indicated it may allow app developers to direct users to third-party payment options outside Apple and Google's app stores. Will Hayter, executive director for digital markets at the CMA, said fees for steering should be "fair and reasonable." The regulator is also weighing whether to require Apple to open up its near-field communication technology on iOS.
Analyst Views on Apple's AI Strategy
Opinions on Apple's AI push remain divided. At the company's June developer conference, TECHnalysis Research's Bob O'Donnell described the new Siri as "AI for the masses" but noted it still isn't "agentic." MoffettNathanson's Craig Moffett said the updates weren't "earth-shaking," though he acknowledged Siri could now be a "credible chatbot." Paolo Pescatore of PP Foresight highlighted the "inevitable tension between convenience and privacy."
Looking ahead, Apple is scheduled to report fiscal Q3 earnings on July 30. Analysts expect EPS of $1.89 for the quarter, with full-year 2026 EPS forecast at $8.75 and 2027 at $9.64. U.S. stock markets will be closed on Friday, July 3, for Independence Day, with early closes scheduled later in the year.
