Apple's Big Reveal: Can the iPhone 17 and New "Air" Model Justify the Stock's Massive Rally?

Apple is set to take the stage on Tuesday for its most important annual showcase, the September product launch, and expectations are already running high. Investors and consumers alike are waiting to see if the company can deliver a compelling upgrade cycle at a time when its stock has rallied sharply, buoyed by relief on tariffs and a favorable court ruling in the Google antitrust case. With shares having added nearly $430 billion in market value since July and sitting near their highest levels since February, the bar is high. The event could determine whether the rally has legs—or whether it turns into yet another “sell the news” moment.

The centerpiece of the event will be the iPhone 17 lineup, Apple’s flagship product and the backbone of its ecosystem. Four new models are expected: the iPhone 17, the higher-end iPhone 17 Pro and Pro Max, and an all-new slimmed-down model dubbed the iPhone 17 Air. Pricing is forecast to start at $799 for the base model, with the Air coming in at around $949, the Pro at $1,049, and the Pro Max at $1,199, though some analysts see a possibility of $1,249 at the very top. These price points reflect modest increases, largely justified by storage upgrades and tariffs. Surveys suggest that nearly 70% of existing iPhone users are considering upgrading, which could underpin sales momentum in the second half of 2025.

The iPhone 17 Air may steal the show. The ultra-thin device, expected to measure just 5.5 mm thick, would mark Apple’s first dramatic hardware redesign since the iPhone X in 2017. It features a 6.6-inch OLED display, a streamlined single 24-megapixel camera, and a lightweight form factor that could appeal to consumers who want differentiation from the increasingly standardized flagship market. While sacrifices on internal components may be required to achieve such thinness, the Air offers Apple the chance to inject excitement into its lineup after years of incremental updates.

Beyond iPhones, Apple is preparing updates across its hardware portfolio. New Apple Watch models are expected, including the Series 11 and a more rugged Watch Ultra 3. These could feature enhanced battery life, new health-tracking capabilities such as blood pressure monitoring, and potentially AI-driven health alerts. AirPods Pro 3 may also debut, with better battery life and possibly real-time translation features. There are even whispers of a refreshed Apple TV with 4k support. In typical Apple fashion, at least one surprise announcement is likely.

Artificial intelligence, however, remains the elephant in the room. Rivals like Google and Samsung have made AI central to their smartphone launches, while Apple has been more cautious. Its “Apple Intelligence” platform, announced at WWDC, is still in early stages, and many of the AI enhancements—such as an upgraded Siri capable of cross-app tasks—have been delayed. While Apple insists it is embedding AI across devices, investors worry that it is falling behind in the AI race. If Tuesday’s event lacks significant AI news, the perception that Apple is lagging could weigh on sentiment, especially given the stock’s rich valuation at 30 times forward earnings.

The regulatory backdrop has been a source of relief. Earlier this month, Apple scored a major win in the U.S. v. Google antitrust ruling, which preserved its lucrative search deal with Alphabet. That contract, estimated at $20 billion annually, ensures Google remains the default search engine on Safari while enhancing Apple’s bargaining power for future deals. With Services already accounting for more than a quarter of Apple’s revenue, this ruling reduces one of the biggest risks to its high-margin segment.

Still, growth is an issue. Apple’s 10% revenue gain last quarter was its fastest in over three years but trails tech peers like Alphabet and Meta, which trade at cheaper valuations. Analysts expect revenue growth to slow in the coming quarters, leaving investors concerned about whether the iPhone 17 cycle can provide a meaningful lift. Bank of America has warned that iPhone reveals are usually “sell-the-news” events, with the stock often dipping on launch day before recovering in the following weeks. Morgan Stanley, however, argues that Apple’s ability to raise prices could be an underappreciated catalyst, particularly if consensus growth expectations for fiscal 2026 prove too conservative.

Stock performance adds another layer of complexity. Apple has climbed 38% from its April lows, fueled by tariff relief and regulatory clarity, but remains down over 5% year-to-date even as the Nasdaq 100 has gained 13%. Shares closed Friday around $240, above the average analyst target of $238, suggesting limited upside unless the launch meaningfully shifts sentiment. The setup is technically favorable, with the stock breaking out of the mid-$230s and targeting $260, but execution risks remain. Huawei’s competitive pricing in China and Apple’s supply chain transition to India could pressure margins, particularly as tariffs weigh on costs.

Apple’s September 9 event—marketed with the tagline “Awe dropping”—will be livestreamed globally at 10 a.m. Pacific. If history is any guide, the stock may face near-term selling pressure regardless of how well the products are received. The real question is whether the combination of a redesigned iPhone Air, modest price hikes, and a resilient Services segment can convince investors that growth is returning. Absent a bold AI narrative, Apple will need its hardware upgrades to carry the day. Investors will be watching closely to see if the world’s most valuable company can still surprise—or if its once-magical product launches have become predictable.