It’s starting to feel
like Apple’s tradition: every big launch comes with a problem. The iPhone 4 had
signal issues when held a certain way, the iPhone 6 Plus was bending in
people’s pockets, and the iPhone 15 Pro was getting unusually hot until an iOS
update helped fix it.

Now it’s the iPhone
Duo’s turn. Just hours after sales kicked off, reports of screens cracking
along the fold started coming in, though Apple says only a small number of
devices are affected and has advised customers to contact AppleCare for a
replacement.

Apple shares slipped
around 1% on the news, not a huge move, but could this turn into a bigger
problem?

In similar cases,
Apple shares have typically dipped 3–5% over a few days, without driving
customers away. Most users have stayed loyal, waiting for fixes rather than
switching brands, while Wall Street has quickly moved on, knowing Apple has
plenty of cash to cover repairs and legal costs.

It’s also worth noting
that the iPhone Duo was never expected to be a game-changer for Apple’s
revenue. Gene Munster, managing partner at Deepwater Asset Management, expects
Apple to sell 20 million units in fiscal 2027, accounting for roughly 7% of
total iPhone sales that year.

But there’s another
risk that could hit Apple: AI.

Rising financing
costs, power shortages for data centers, intensifying competition between AI
models, and doubts over whether massive investments will pay off have investors
demanding proof that all this spending is actually driving revenue and profits.

That puts the
spotlight on Big Tech earnings and how quickly AI
investments translate into real revenue. Investors want to see AI spending
drive sustainable revenue growth, not just larger capital budgets, and so far,
few companies have convincingly demonstrated they can do so.

In particular,
according to Apollo, revenue per employee in the tech sector has climbed from
around $550,000 in 2022 to nearly $800,000, while the other 493 S&P 500
companies remain at roughly $550,000. Tech profit margins have also risen,
while those of other companies have hovered around 10%.

The bigger question is
whether AI can eventually deliver similar productivity and profit gains across
the rest of the economy. If it can’t, investors may start questioning whether
the massive spending is really paying off, and that could put further pressure
on tech stocks, including Apple.

Keep an eye on the stock heatmap to see how
Apple’s sell-off compares with broader market moves and whether weakness is
spreading across major tech stocks. S&P 500 futures can also offer an early signal of how investors are
positioning ahead of the next market session, especially as Big Tech earnings
and AI spending remain in focus.