Apple's New CEO Faces Challenge of Restoring Innovation

Apple's incoming CEO John Ternus faces a significant challenge in restoring innovation to the company, according to Bank of America. The bank notes that much of Apple's core business is expected to remain stable, but anticipates a shift towards AI-driven devices and new product categories like wearables and smart home tech.

The bank also expects an increase in Research and Development (R&D) spending under Ternus, signaling a strategic pivot from the previous leadership's focus on services and cash neutrality. This move is expected to be driven by Apple's potential AI innovations and new product categories.

Apple's stock price target has been set at $358.69, about 15.7% above its recent close of $310.03, supported by a strong product cycle including the iPhone 17, new MacBooks, and Siri AI developments. The company reported solid Q3 2026 earnings with double-digit growth.

The bank's expectations are based on Apple's commitment to investing in R&D and acquisitions, which is expected to drive innovation and growth in the company. However, this move also increases risks for investors, as it may not be successful in generating returns.