Apple ‘s surprise leadership announcement on Monday left Wall Street reconsidering their expectations for the future of the technology titan. The iPhone maker said John Ternus, a senior vice president of hardware engineering, will succeed CEO Tim Cook on Sept. 1. Cook would move to the role of executive chairman after about 15 years as chief executive. Apple shares last slid around 0.5% in extended trading. A decline in Tuesday’s session threatens to drag the megacap tech giant into the red for 2026, given it’s currently only up 0.4% on the year. Apple shares soared more than 1,930% since Cook took the helm in August 2011. The S & P 500 climbed roughly 504% over the same period. Investors were caught off guard by the announcement, telling CNBC they expected Cook to remain in the CEO spot for longer. But they aren’t running for the hills, and said Ternus’ hardware background provides reason for optimism. “This is something that we, of course, have been expecting for a long time,” said Gene Munster, managing partner at Deepwater Asset Management. Still, “this is a big deal.” The ‘continuity candidate’ Munster said the stock should rally as investors warm up to the idea of Ternus leading of one of the world’s biggest and most well-known public companies. The Deepwater partner said to expect big hires under Ternus from AI-focused firms like Anthropic and OpenAI. But Munster and other investors don’t see the company trying to go head-to-head with the large-language model makers currently leading the AI boom. Instead, Ternus’ selection suggests that Apple sees its future tied to products like glasses or a foldable smartphone, according to Gil Luria, head of technology research at DA Davidson. “It’s unlikely that they’re going to jump in as the sixth-frontier model competitor,” Luria said. “They can let everybody else compete on that front and then just leverage the winning result.” Zeroing in on hardware makes sense given the company hasn’t had many home runs in the space over recent years, according to RiskReversal Advisors principal Dan Nathan. He said on CNBC’s “Fast Money” it would take a different set of products to grow revenue from $400 billion to $1 trillion. Ternus should satisfy the institutional investors hoping for margin management and tight operations rather than big swings on AI, said Patrick Moorhead, founder of Moor Insights & Strategy. “Ternus really is the, I’ll call it, the continuity candidate,” Moorhead said. “He’s not a risk-taking visionary.” End of an era The end of Cook’s tenure showed his political swagger in the face of President Donald Trump’s tariffs, market participants said. Wedbush analyst Dan Ives said in a note to clients that Cook acted as “10% politician” in his role as CEO. Similarly, Munster said Cook acted “like a president of a country, not a company.” AAPL .SPX mountain 2011-08-24 Apple vs. the S & P 500 since August 2011 Cook’s decision to implement stock buybacks and dividends helped win over value-focused investors including Warren Buffett, said RiskReversal Media co-founder Guy Adami. Berkshire Hathaway began buying Apple shares in 2016 and was the conglomerate’s largest holding at the end of last year. But Cook is leaving the post at a pivotal time with the technology sector amid the AI revolution. Even if the company stays out of the race to build models, Wall Street will still want to see an ability to integrate AI into products. Otherwise, AI firms could attempt to launch their own products like phones or laptops. “Cook’s done this incredible job around kind of the geopolitical side,” Munster said. “The next frontier of being a successful tech company is much bigger than geopolitical. It’s about nailing AI.” To be sure, Ives said the shocking announcement implies that there was “clearly a push for change” within Apple’s top brass. While he said the timing could make sense, it also “creates questions.” Cook’s exit on a strong note can lead to a “hangover” in the Ternus era, Luria said. But Adami cautioned investors against overthinking the baton-passing. “As the old saying goes, the cemetery is filled with irreplaceable people,” Adami said on “Fast Money.” “Apple will get through this.” What’s next? Multiple investors told CNBC that they anticipate a strong earnings report out of Apple next week. It’s unlikely that Cook would announce a departure ahead of a weak release, they said. “Tim Cook wouldn’t be retiring at a time of crisis,” Luria said. “He has an opportunity to walk away at a time with record iPhone sales and significant growth, a good upgrade year and a nice road map ahead.” But Apple will also need to deliver at its Worldwide Developers Conference in June, traders said. They will keep a close eye on its work with Siri, as that can help inform their view of Ternus. Wedbush’s Ives kept his outperform rating and $350 price target intact following Apple’s announcement. Apple shares closed at $273.05 on Friday.The majority of investors polled by LSEG have a buy rating on the stock. Metropolitan Capital Advisors CEO Karen Finerman similarly advised investors not to jump the gun. “I wouldn’t trade on it,” Finerman said on “Fast Money.” “To me, the story hasn’t changed.”