Despite beating estimates and issuing upbeat guidance, Apple Inc. (NASDAQ:AAPL) shares barely moved as investors look for clearer evidence that artificial intelligence will meaningfully drive future growth, according to Deepwater Asset Management’s Gene Munster.

Apple reported fiscal first-quarter revenue of $143.76 billion, topping Wall Street expectations of $138.42 billion, while earnings came in at $2.84 per share, ahead of estimates of $2.66, according to Benzinga Pro.

Revenue rose 16% year over year and earnings climbed 19%.

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The company also issued stronger-than-expected guidance, forecasting March-quarter revenue growth of 13% to 16% and gross margins of 48% to 49%. Apple shares, however, gained less than 1% in after-hours trading.

Munster said the muted stock reaction reflects investor skepticism around Apple’s AI strategy, not dissatisfaction with its financial performance.

“I think it’s as simple as investors want to hear more about how AI is going to have a meaningful impact on their business,” Munster said in a post-earnings commentary.

He noted that Apple’s results show customers are satisfied and continue upgrading devices, but investors remain unconvinced without clearer AI milestones or timelines.

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Munster traced the issue back to Apple’s unveiling of Apple Intelligence in mid-2024, which raised expectations that AI would reaccelerate growth.

He said the company later underdelivered on those expectations, creating a credibility gap.

“That misstep was un-Apple-like,” Munster said, adding that Apple has since shifted to a talk less, show later approach under CEO Tim Cook.

During the earnings call, Cook offered limited updates on AI, saying only that a revamped Siri powered by Apple Intelligence would arrive “this year,” without additional detail.

Munster highlighted a sharp rebound in China revenue, up 38% year over year, along with continued growth in Apple’s installed base, now exceeding 2.5 billion active devices.