Apple stock slips as John Ternus prepares to succeed Cook

Apple shares fell 1.8% on Monday as John Ternus prepares to succeed Tim Cook as chief executive.

Ternus will lead a company valued at nearly $5 trillion. When Cook became CEO, Apple sold about 72 million iPhones; Counterpoint Research estimates iPhone sales will reach roughly 255 million this year. Apple returned more than $1 trillion to shareholders through dividends and buybacks during Cook’s tenure, with repurchases estimated at about $877 billion.

Ternus inherits responsibility for Apple’s artificial intelligence strategy, work to improve the Siri assistant and efforts to find new revenue sources beyond the iPhone. Apple has released software updates to enable Siri to complete more tasks and is testing new AI features.

Early testing of the Siri AI beta found it can run slower than competing virtual assistants, although use of third-party backend technology has improved responsiveness. Analysts say the company must determine whether the iPhone will remain the central device for personal computing as new devices and interaction models emerge.

Daniel Newman, chief executive of Futurum Group, described identifying the next computing platform after the smartphone as Ternus’s ‘big job’ and called Apple an ‘experience layer’ for AI because many consumers access services through Apple devices.

The stock trades at about 33 times next year’s earnings, compared with roughly 20 times for the S&P 500, while Apple’s earnings growth is estimated at about half the market’s rate. Craig Moffett of MoffettNathanson cautioned that a stretched valuation can reduce the safety investors expect.

Competition among AI companies for memory, storage and logic chips is putting upward pressure on component costs and creating shortages that could raise Apple’s production expenses. The company has passed some higher costs to consumers.

Much of Apple’s manufacturing and supply chain remain concentrated in China, exposing the company to tariff risk and geopolitical tensions as U.S.-China trade frictions continue. Legal and regulatory rulings have limited fees on some in-app purchases; Appfigures estimates U.S. App Store commission revenue fell about 6% in the June quarter.

Apple’s products show continued demand. The iPhone 17 Pro has drawn customers with camera and battery improvements. Mac computers using Apple-designed chips are in higher demand partly because those processors can run large language models locally, contributing to supply constraints.

A foldable iPhone is expected at Ternus’s first product launch; IDC projects the device could capture as much as 40% of the foldable smartphone market by the end of 2027. During Tim Cook’s tenure, Apple’s stock rose more than 2,200%.

Ternus comes from a hardware and engineering background. Observers note that other Apple initiatives, including headsets, automotive plans and smart home hardware, have not matched iPhone-level sales. Ternus faces the tasks of advancing Apple’s AI work, improving Siri and identifying new growth avenues while sustaining the scale and profitability built under Cook.