Cook’s AI legacy at risk at final developer conference

apple Stocks are near all-time highs and iPhone momentum is picking up, but Tim Cook heads into next week’s Worldwide Developers Conference with one unanswered question from his final developer conference as CEO. Could it finally deliver the artificial intelligence experience Apple promised two years ago?

The expected highlight of WWDC is a major overhaul of Apple’s long-criticized voice assistant, Siri.

Analysts expect Apple to show a more powerful version of Siri with standalone chatbot-style apps, personal context, on-screen recognition, the ability to process multi-step commands, and deeper routing to external models. googleGemini.

For investors, WWDC is a test of whether Apple Intelligence can become a true iPhone upgrade driver, justifying a valuation that already assumes Apple will continue to be the device of choice for consumers accessing AI, regardless of the model they use.

For developers, this is a test of whether Siri can become a true platform for the agent era, and one worth building on.

And for Cook, it’s a legendary moment.

As John Tarnas prepares to replace Cook as CEO, WWDC gives the company one last major development step to show that Apple’s AI strategy is finally coming together.

Futurum Group CEO Dan Newman told CNBC that Apple Intelligence was “one of the big black eyes” of Mr. Cook’s tenure.

“It’s clear that this is the moment where Apple can say, ‘We can leverage our installed base of billions of users,'” Newman said, adding that Apple also needs to prove to developers that Siri is “the thing to build.”

Moffett Nathanson wrote this week that Apple stock has “done all the work that the AI ​​story has yet to do.”

The company enters WWDC at an all-time high, with profits up about 36 times and value up $1.6 trillion from a year ago. The company said Apple is performing very well due to the strongest iPhone cycle in years, China moving from structural concerns to a share-gaining story, and services doing well again.

“The question at WWDC26 is not ‘Will Apple come out with a better Siri?’ It almost certainly will,” Moffett-Nathanson wrote. “The question is, ‘Can a better Siri justify the multiple features it’s already supposed to do?'”

Moffett-Nathanson said Siri must become a trusted agent to detain multiple people. This means Siri needs to move from a command portal to an assistant that can reliably perform multi-step tasks across apps.

But that depends on third-party developers making their apps work with App Intents, Apple’s system for letting Siri perform actions within apps.

The company said it raises a “chicken-and-egg problem.” Siri is only useful if enough developers support it, but developers may want to wait to see if consumers actually use Siri before investing in their work.

Moffett-Nathanson noted that Apple is reportedly planning initial App Intents partners, including: Uber, AmazonTemu, YouTube, WhatsApp, Facebook, Threads, AllTrails. But the company warned that after years of tensions over the economics of the App Store, developers may be reluctant to cede more control to Apple.

So WWDC is more than just a consumer AI demo.

Apple must convince customers that Siri is finally useful and developers that Siri can be a platform worth building on.

“Cook is completely late to AI in some ways, but by spending efficiently, not over-committing to capital expenditures, and still owning the surface of it, they’re actually in a position to be late to AI for a while and still be successful at some point in the future,” Newman said.

He added that this is “really a last hurray” for Cook to trigger an inflection point before Tarnas takes over.

meanwhile microsoftAlphabet, Amazon, meta Despite spending tens of billions of dollars a year on AI infrastructure, Apple has little to do with the frenzy, instead betting on device-level distribution, privacy, and a more model-agnostic approach.

This is a potential advantage for Apple, which could bridge the AI ​​gap through partnerships instead of taking on the burden of the massive data center spending faced by big tech companies.

The Information reported this week that Apple’s overhauled Siri is expected in September and will run partially on Google Cloud. Nvidia However, CNBC has not independently confirmed those details.

This would be a major shift for Apple, which has long preferred owning its core technology. But investors may be willing to accept the tradeoff if it gives Apple a faster path to a working AI product.

Neumann said the partnership could also make sense for Google, as the use of an Apple-sized token would be a key validation for Gemini, allowing it to build on a search partnership that has long been profitable for both companies.

There are also questions about whether Apple underinvested.

Stephanie Link, chief investment strategist at Hightower, said Apple has historically been conservative with cash, preferring stock buybacks over large acquisitions or big investments. He said discipline has helped improve profit margins, but he also said he was frustrated by Apple’s lack of participation in what rivals have described as “once-in-a-generation” innovations.

Dan Niles, founder of Niles Investment Management, said Apple is “ridiculously behind on AI.”

Niles praised Cook’s supply chain execution and political skills, calling him a “supply chain god,” but noted that the company’s most ambitious recent product launch, the Vision Pro, was a failure.

Still, Niles said he’s encouraged by Apple’s increased R&D spending, but added that he thinks the next steps in product execution are important.

Link said he doesn’t like the inclusion of Apple stock in WWDC, considering its stock price trends and valuation.

“It’s not that I don’t like the stock. It’s just that the stock is doing well. I don’t know if we’re going to do anything big at WWDC.”

Link said Apple trades at about 34 times expected growth, which assumes growth of about 10%, and it’s unclear whether the company will announce anything big enough to move the stock. He added that Apple’s position is only 5 basis points, far below the company’s weight in the S&P 500, due to uncertainty around valuation and whether investors will get the answers they want at developer conferences.

“I don’t think WWDC will be that big of a catalyst,” Jim Leventhal, a partner at Cerity Partners, told CNBC. “I don’t think anything significant will come out of this World Developers Conference. I don’t see it.”

Mr. Leventhal, who holds a market-focused position at Apple, said he is “less enthusiastic” about WWDC as a catalyst. He said the stock is at the high end of his valuation range, and while he is not selling, it would be difficult to buy further.

UBS said it expects Apple to focus on AI at the event, but doesn’t expect WWDC to be a positive catalyst for the stock barring any surprises. The company highlighted expected features such as Gemini integration, linking to third-party models via “extensions,” a dedicated Siri app, iCloud sync for chat and personalization, and on-screen recognition.

UBS left its iPhone forecast unchanged, saying other anticipated features are useful but unlikely to substantially drive demand.

goldman sachs He was even more hopeful, saying the new Siri could become a major demand driver for the iPhone and support the service’s growth as developers use Apple Intelligence tools to build new apps.

“I know Tim Cook wants to be high,” Link told CNBC. “But I think he had his best performance this quarter. This quarter was great, better than expected.”

Larger consumer testing will take place in September, when Apple is expected to launch its new iPhone lineup and possibly an upgraded Siri experience.

Gene Munster, managing partner at Deepwater Asset Management, said he expects Apple stock could sell off around WWDC, but his long-term case remains the same if Apple shows investors it understands where AI is headed.

“They don’t have to get it right,” Munster told CNBC. “They have to show that they understand and that they know where this is going, which means AI products that people actually want to use, that they don’t have right now, and that leverage what makes Apple unique.”

Munster said the hurdles are “surprisingly high” for companies that haven’t yet properly leveraged AI. At the very least, he said, Apple needs to demonstrate a good chatbot experience on par with Gemini and ChatGPT. The more important test will be whether Apple can show that tighter integration with its own hardware will make AI more personal and useful.

“You can’t use Genmoji 2.0,” Munster said. “That won’t fly.”

That puts Cook in a difficult position heading into WWDC. A meaningfully useful Siri could help reset Apple’s AI narrative and bring the iPhone upgrade narrative into the fall.

Anything that appears incremental, slow, or too reliant on partners risks reminding investors of the execution mistakes Apple has tried to make in the past.

For the CEO who turned Apple into one of the world’s most valuable companies through management discipline, supply chain mastery and service expansion, the final developer conference may come down to something less familiar: whether Apple can make Siri feel like the future.

Spotlight: Apple built a hardware empire in its first 50 years. The next 50 may be defined by AI.