Apple shares carry a valuation that leaves little room for disappointment, and the newest reason to own the stock also comes with an unresolved question about Siri AI costs. The company trades at 38.5 times earnings, well above the S&P 500’s 22.8 multiple, a level that appears to assume continued growth. Whether Siri AI accelerates that growth, and at what expense, is still an open issue.
A New Reason to Upgrade, and a New Expense Line
Apple began rolling out its Siri AI assistant in September, giving customers a fresh incentive to replace older iPhones. The company makes money when people buy new devices to access the feature. It spends money when Siri AI requests are processed on Apple’s own servers, with those computing expenses recorded as a cost of the services business.
Management has described on-device requests as carrying no meaningful cost. Server-side requests are a different matter. The company has also pointed to potential revenue openings through third-party apps, partnerships and broader access to Siri AI features that run on its servers.
The rollout started in beta for U.S. English users in September. French, Japanese, Korean, Portuguese and Spanish were added in October.
What the Fourth-Quarter Call Revealed
During Apple’s fiscal fourth-quarter 2026 call on November 2, analysts pressed management on how Siri AI would figure into a future where AI agents become more widespread. They also asked whether a rapid increase in usage would force Apple to spend more on computing capacity.
Management’s answer was that it is still very early to know how Siri AI requests will split between devices and servers. That uncertainty makes the cost difficult to forecast.
The December-quarter gross margin outlook includes some expenses tied to the Siri AI ramp. Apple’s forecast is 45% to 46%, down from 47.9% in the September quarter, which had benefited by about 1 point from tariff refunds. Management said most of the decline from the September quarter, after setting aside that refund benefit, is expected to come from higher memory costs. The company has not quantified what Siri AI adds to sales or what it costs.
iPhone Revenue Still Dominates
In fiscal 2026, iPhone revenue reached $254 billion, or 53.1% of Apple’s total, representing 21.2% growth over fiscal 2025. For the September quarter, iPhone revenue was $57.6 billion, up 17% year over year, and Apple set a September-quarter record for upgraders worldwide.
Because Siri AI arrived at the very end of the fiscal year, most of that iPhone growth occurred before the feature was available. Apple also raised iPhone prices in September, the same month Siri AI launched, so the next set of iPhone figures will reflect both changes together.
The Numbers to Watch Next
Apple expects total revenue to grow 7% to 10% in the December quarter, following 11.7% growth in the September quarter. Management said the range reflects constrained supply.
When Apple next reports, expected in January 2027, iPhone revenue for the December quarter compared with the prior-year period will be the key figure for gauging whether Siri AI is driving upgrades. On the cost side, the December-quarter gross margin will matter because management said it includes some Siri AI expenses.
On AI agents, Apple’s chief executive described them as promising tools for users but said the company wants people to understand what they are granting access to.
