There's an old saying in investing, "Buy the rumor, sell the news." The idea is that the initial excitement about a potential development for a company could drive the stock higher, with a letdown when the development actually happens. We saw this adage borne out with Apple (AAPL -1.62%) this week.

Apple stock climbed higher over the previous weeks as investors eagerly anticipated what new artificial intelligence (AI) capabilities the company would announce at its annual Worldwide Developers Conference (WWDC). This event kicked off on Monday. Instead of enjoying a nice bump from the WWDC announcements, though, Apple's shares fell nearly 2%.

It seems fair to say that Apple's big AI reveal underwhelmed -- at least for some. Should you buy the stock anyway?

Why Apple stock fell after its AI update

Let's first address why Apple stock fell rather than jumped after its AI update. Sure, the buy-the-rumor-sell-the-news effect manifested itself. But why?

One culprit is that pundits had already predicted nearly all of Apple's announcements. Some of this was due to leaks from inside sources. If Apple wanted a bigger splash from its WWDC, it needed to keep its secrets better.

Of course, it can be a good idea to allow some news to leak in advance. However, with this strategy, Apple needed a big surprise to reveal at the WWDC event, and there were no big surprises.

A key part of the problem was that Apple's updates were somewhat boring. Several of the new iPhone capabilities have been in Android smartphones for a while. Other capabilities were already available via third-party apps. Indeed, some observers noted that Apple undercut the business models of quite a few of these third parties.

The good news

Before we dismiss Apple's updates altogether, it's important to point out that the stock rebounded on Tuesday. I suspect some investors were able to recognize the value in Apple's announcements after having a little time to digest everything.

I won't parse through every new capability Apple revealed. You can easily find comprehensive reviews of all of the updates online. However, there were three things I think are especially noteworthy.

First, Apple's version of AI (called Apple Intelligence) will only be available on iPhone 15 Pro and later iPhone models. This could spur many owners of older iPhone models to upgrade their phones. If they do, it would likely enable Apple to return to solid revenue growth.

Second, I wouldn't underestimate the appeal of Apple's emphasis on privacy. The company stressed the on-device processing with user data remaining private. It also introduced Private Cloud Compute, a cloud service that Apple claims "sets a new standard for privacy in AI."

Third, WWDC was just the beginning of Apple's renewed AI efforts. As Andreessen Horowitz partner Steven Sinofsky said in a post on X (formerly known as Twitter): "Excellent. Today was super high on 'vision' for Apple with tons of future tense."

Is Apple stock a buy?

Is Apple stock a buy after its WWDC update? I have a nuanced answer.

I understand why some view Apple's AI announcements as underwhelming. Don't get me wrong: I think Apple is introducing a lot of helpful new functionality. At the same time, though, there wasn't the "killer app" to wow everyone. Because of this, I'm uncertain that the WWDC will spark sustained momentum for Apple stock.

However, I suspect we'll see a surge in iPhone upgrades after the new model is introduced later this year. The cumulative effect of Apple Intelligence capabilities, especially free access to ChatGPT, could be tempting for many customers.

Most importantly, I'm confident Apple is committed to being the leader in edge AI (deploying AI on devices where data is created). This could be a big new market opportunity for the company that enables it to grow for years to come.

Should you buy Apple stock because of what the company announced this week at the WWDC? Probably not. Should you buy Apple stock because of its long-term potential? I think so.