Apple’s Potential Comeback Fueled by iPhone Loyalty and AI Prospects

Apple Inc. (AAPL -0.57%) has underperformed both its tech peers and the broader market this year, but historical patterns suggest a rebound may be imminent. The company has repeatedly demonstrated an ability to reinvent itself after periods of stagnation, with the iPhone remaining its linchpin. Accounting for roughly half of Apple's revenue, the iPhone benefits from an entrenched user base—over 50% of U.S. smartphone owners use Apple devices, creating a formidable competitive moat.

Despite recent skepticism around Apple's AI strategy, dubbed Apple Intelligence, the next five years could see the company leverage its hardware-software integration to deliver breakthroughs. iPhone sales surged 13% year-over-year in 2025, underscoring enduring brand loyalty. While the tech giant lags in visible AI innovation today, its ecosystem advantages and upgrade cycles position it for renewed momentum as AI capabilities mature.