Bank of America Securities believes that Apple's latest artificial intelligence strategy, unveiled at the 2026 Worldwide Developers Conference (WWDC), marks a major transformation that could strengthen its ecosystem and drive future hardware upgrade cycles.

According to the bank, the new Siri AI evolves the assistant into a context-aware, multimodal platform capable of understanding users' personal data, on-screen content, and activity across Apple's ecosystem of apps. The firm believes this positions AI as a native layer spanning the iPhone, iPad, Mac, Apple Watch, and other Apple devices, further enhancing ecosystem stickiness and increasing user engagement with Apple's services.

A key highlight of the new architecture is Apple's hybrid AI model, which combines on-device processing, Private Cloud Compute, and cloud infrastructure powered by Google Cloud and NVIDIA GPUs to handle more demanding tasks.

Apple also introduced its Apple Foundation Models (AFM 3) family, consisting of five models—two on-device models and three cloud-based models—designed to support a wide range of tasks, from everyday queries to advanced reasoning and image generation.

Bank of America highlighted AFM 3 Core Advanced as one of the most significant announcements from the event. The 20-billion-parameter sparse model activates only a small subset of its parameters for each request, enabling Apple to deliver more powerful on-device AI while keeping memory usage and computing requirements under control. According to the analysts, this approach is expected to improve response quality, enhance privacy, reduce latency, and lessen reliance on expensive cloud infrastructure.

The brokerage also noted that Apple's collaboration with Google on cloud-based AI models represents a pragmatic step toward accelerating its generative AI capabilities. However, the analysts cautioned that as users increasingly rely on complex AI features requiring cloud inference and image generation, Apple's profit margins may become more sensitive to cloud computing costs.

Bank of America estimates that by 2030, around half of all AI requests will still be processed on-device. However, while Apple's premium Cloud Pro model is expected to account for only around 5% of total AI requests, its significantly higher computational intensity could represent as much as 67% of the company's weighted cloud computing costs. The analysts believe that efficiently allocating AI workloads will be critical to maintaining profitability as Apple Intelligence adoption continues to expand.

Market Insight：

Bank of America reiterated its positive outlook on Apple, citing expectations of an AI-driven iPhone replacement cycle, continued growth in services revenue, and consistent shareholder returns. The firm also views the successful rollout of the new Siri AI platform as a key driver of Apple's long-term growth.