Apple's AI Dilemma: Analysts Push for Perplexity Acquisition as Buyback Strategy Falters

Apple's AI efforts 'have struck midnight' and the only way it can stop getting further behind is acquiring Perplexity, analyst Dan Ives says

Apple is falling behind in the AI race, and the only way it can catch up is by buying the AI startup Perplexity, according to a top analyst. Dan Ives of Wedbush Securities said it's clear Apple is incapable of producing its own AI in-house, despite a company culture that strives to build superior products internally. In recent days, some of Apple's top AI talent has also been poached by increasingly aggressive AI talent recruiter Meta, Bloomberg reported. Meanwhile, competitors are increasingly outdoing the company. "Apple is at a highway rest stop on a bench watching this 4th Industrial Revolution race go by at 100 miles an hour," wrote Ives in a Wednesday note. Ives was more hopeful about Apple's AI prospects in January, despite writing that the company was facing a "fork in the road" year on the technology. At the time, he highlighted Apple's clearest advantage in the AI arms race: its existing base of 1.5 billion iPhones and 2.3 billion iOS devices used by people around the world. In his Wednesday note, Ives struck a more apprehensive tone, adding Apple still retained the advantage of its widespread devices and could eventually win the AI race, but that its "window is narrowing." Apple's most recent WWDC, its annual event for showcasing new tech, also "was a snoozer," Ives wrote, and barely mentioned AI. "Apple is way too behind and does not have the AI technology to compete. The clock has struck 12, they need to acquire Perplexity or risk getting further behind," Ives told Fortune in an email. Even if Apple has to pay around double what it is currently worth, it should acquire Perplexity, he wrote. The San Francisco-based startup, reportedly worth $14 billion, has made strides among AI enthusiasts for citing links to articles and other information when its AI responds to queries. Perplexity on Tuesday also launched Comet, an AI-based web browser, for select subscribers, in its latest effort to compete with tech giants Google and Microsoft. Yet, Tomasz Tunguz, the founder of Theory Ventures, which invests in early-stage enterprise AI startups, said acquiring Perplexity would come with myriad privacy considerations for Apple. The company is used to providing end-to-end encryption for products like iMessage and FaceTime, and would need to find a solution for how Perplexity would run, either locally or on a secure cloud architecture. "They would need to have a lot of confidence they could build an architecture from end to end that had that privacy component," Tunguz told Fortune. Kevin Novak, founder and managing partner of early-stage AI investment firm Rackhouse Ventures, said it's unclear whether a large acquisition would work for Apple. The company has tried to maintain the pro-building ethos of Steve Jobs for much of its history, and has been shy to acquire. Among its largest acquisitions was its $3 billion purchase of Beats electronics in 2014. "This would be challenging for any company, but especially given Apple's sort-of corporate ethos around perfectionism, may be especially challenging for Apple," Novak told Fortune. Still, Ives, for his part, said he believes Perplexity could be a natural fit for Apple and could especially help level up Siri to make it many people's most frequent exposure to AI. "If Apple acquires Perplexity, the combined forces of Cupertino with Perplexity would be a game changer on the AI front and rival ChatGPT given the scale and scope of Apple's ecosystem," wrote Ives in the note.

Why Apple Needs to 'Rip the Band-Aid Off' and Make This Move, According to Wedbush

Apple should be willing to pay more than double Perplexity's current value of about $14 billion, Ives argued, given the huge monetization potential of AI. Apple (AAPL) should consider making a major acquisition if it wants to catch up to its peers in the artificial intelligence race, according to one Wall Street analyst. Wedbush Securities' Dan Ives, a longtime Apple bull, wrote Wednesday that while Alphabet's (GOOGL) Google, OpenAI, and others have pulled ahead on AI, "Apple is at a highway rest stop on a bench." Ives' solution for the iPhone maker is to "rip the band-aid off" and acquire Perplexity, along with its AI-driven search engine. Such a deal "could redefine Apple's AI strategy and would fit in very well with Siri," Ives said. "Perplexity's AI algorithms and technology are some of the most impressive in the tech AI world." Perplexity, which is private, has a valuation of about $14 billion based on its current investing round, Ives noted. That said, even if Apple had to pay $30 billion to get the deal done, "it's a drop in the bucket relative to the monetization opportunity Apple can achieve on AI," he added. The delayed rollout of an AI-enhanced Siri has been a disappointment for Apple investors and analysts this year. Apple previously expected to release a more powerful version of its voice assistant Siri as early as this spring. However, the company suggested at its Worldwide Developers Conference last month that more information on that is unlikely to come before 2026. Apple has reportedly discussed with ChatGPT maker OpenAI and Claude developer Anthropic the possibility of relying on their AI models instead of in-house technology. Siri can already be used to access ChatGPT with some iPhone models. The company has also considered adding Perplexity's search engine, said Eddy Cue, Apple's senior vice president of services, in May. Separately, Perplexity launched an AI-powered web browser on Wednesday known as Comet, in direct competition with Google Chrome and other web browsers, according to reports. The browser is currently available to subscribers of Perplexity Max, which costs $200 per month. The urgency around Apple's AI progress comes after the company reportedly had its top executive in charge of artificial models poached this week by rival Meta Platforms (META). Ruoming Pang, the head of Apple's foundation models team, was offered tens of millions of dollars a year to join Meta CEO Mark Zuckerberg's growing "Superintelligence" team, the report said. Zuckerberg has reportedly expressed frustration that Meta has not made enough progress with its AI models. Shares of Apple were little changed Wednesday at about $211. The stock is down roughly 16% for 2025, making it the second-worst performer among the Magnificent Seven after Tesla (TSLA).

Jim Cramer To Apple: Kick Buyback Addiction - Buy A Brain Instead - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

Jim Cramer has a message for Apple Inc. AAPL: Stop recycling your cash and start reimagining the future. The "Mad Money" host isn't mincing words -- he wants Apple to stop pouring billions into stock buybacks and instead invest the cash hoard in a brain. Translation? Ditch the financial engineering and acquire cutting-edge AI talent, tech, and tools -- like red-hot Perplexity -- to supercharge innovation. Read Also: Apple Strikes $500 Million Deal With MP Materials To Reduce China Reliance On Critical Magnets Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get StartedBuybacks: Apple's Favorite Snoozefest With a $3 trillion market cap and a $110 billion buyback plan, Apple's cash strategy is as exciting as watching your iPhone update overnight. Sure, buybacks boost EPS and support the stock, but they don't exactly scream future-forward. Cramer says it's time for Cupertino to break its cycle of cash hoarding and repurchasing and start thinking like a tech company again. Buy A Brain: Cramer's Call For An AI Wake-Up It's Cramer-speak shorthand: Apple doesn't just need AI features -- it needs to buy a brain and embed it deep in its DNA. That could mean scooping up Perplexity, the AI darling behind the Comet browser, whose capabilities could finally give Siri a much-needed IQ boost. Imagine a Siri that doesn't just understand, but anticipates, outperforms Alexa, and becomes the crown jewel of every iPhone. Perplexity: The AI Power Move Apple Won't Make (But Should) Perplexity's tech is catching fire, and Cramer thinks it's exactly what Apple needs to leapfrog Meta Platforms Inc. META and Alphabet Inc.'s GOOGL GOOG Google in the AI race. The catch? Apple's M&A history is notoriously timid. Their biggest moves are usually software updates, not splashy deals. But if there were ever a time to shake things up, it's now. Genius Play Or Meme-Worthy Miss? Cramer's take has the internet buzzing. Bulls say a bold AI acquisition could reignite Apple's innovation engine and stock. Skeptics say it's just another Cramer-ism destined for X sarcasm. Either way, his point stands: Apple can't afford to sit out the AI revolution armed with buybacks and nostalgia. Read Next: Apple Stock A Back-To-School Winner? Nine States Offer Sales Tax Holidays, Big Savings Photo: Shutterstock AAPLApple Inc$209.440.16%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum27.06Growth32.37Quality76.23Value9.16Price TrendShortMediumLongOverviewGOOGAlphabet Inc$184.360.69%GOOGLAlphabet Inc$183.350.74%METAMeta Platforms Inc$703.39-0.99%Market News and Data brought to you by Benzinga APIs

Apple's AI Strategy Costs $630 Billion in Market Cap: Investors Want The Company To Look At Acquisitions - Meta Platforms (NASDAQ:META)

Apple Inc. AAPL is under growing pressure from investors to overhaul its artificial intelligence strategy, after a sharp decline in its share price this year. Check out the current price of AAPL stock here. What Happened: Apple has lost approximately $630 billion in market value in 2025, with investors increasingly frustrated over the company's perceived lag in AI innovation, Bloomberg reported on Monday. Investors are now urging Apple to depart from its conservative M&A approach and consider substantial acquisitions in the AI space. "Historically, Apple does not do big mergers and acquisitions," said Atif Malik, an analyst at Citigroup Inc., noting that Apple's last major deal was its $3 billion acquisition of Beats in 2014. However, he believes investor sentiment would improve if Apple were to buy or take a significant stake in a well-established AI company. See Also: Bitcoin, ETH, XRP, Solana Are In For A 'Long And Exhausting Bull Market,' Bernstein Predicts Apple's shares have plummeted by 14.45% this year, while its competitors, such as Meta Platforms Inc. META, are thriving due to their substantial investments in AI. The company's lack of compelling AI features within its device ecosystem has become a major sticking point for investors. Why It Matters: In February 2025, it was reported that Apple and Meta are in a race to develop AI-powered humanoid robots. Investor frustration deepened last month following the underwhelming Worldwide Developers Conference (WWDC). Critics noted the absence of major AI updates, particularly a delayed Siri overhaul. Bloomberg's Mark Gurman described the event's AI showing as "startlingly minimal." Last month, Apple's Worldwide Developers Conference ended up being underwhelming, leading to investor concerns. The market's response indicated that the minor updates and postponed revamp of Siri didn't resonate well. Bloomberg's Mark Gurman described the absence of "any real new AI features" as "startling." Despite having the resources, Apple has been hesitant to make significant acquisitions in the AI space. That may soon change, with internal discussions underway regarding a potential acquisition of AI search startup Perplexity AI. Apple's recent leadership changes have also sparked discussions about the company's future direction. Price Action: Apple closed Monday at $208.62, down 1.20%, and fell further to $208.01 in after-hours trading, according to Benzinga Pro. Read Next: Dogecoin Soars 21%, Shiba Inu Skyrockets 17% In 7 Days: Are Meme Coins Back? Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: jamesteohart / Shutterstock.com METAMeta Platforms Inc$720.850.47%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum84.90Growth92.07Quality87.91Value26.07Price TrendShortMediumLongOverviewAAPLApple Inc$208.01-1.49%Market News and Data brought to you by Benzinga APIs

AAPL 'Stock Would Soar' If It Buys This, Says Jim Cramer: 'Continued Buybacks Will Do Nothing'

Enter your email to get Benzinga's ultimate morning update: The PreMarket Activity Newsletter CNBC's 'Mad Money' host Jim Cramer placed his bets on Tim Cook's Apple Inc. AAPL to skyrocket if it made strategic acquisitions and stopped its stock buyback program. What Happened: The third-largest company in the world, with a market capitalization of $3.123 trillion, was poised to "soar," said Cramer in a recent X post. This was contingent on Cramer's earlier views, which reiterated an earlier point of acquiring the artificial intelligence-powered answer engine, Perplexity. He said, "If Apple buys Perplexity, we would have our winning bot and the stock would soar." The recommendation is influenced by the U.S. government's antitrust ruling against Alphabet Inc.'s GOOG GOOGL, expected by August 2025, which may force Google to end default search deals with Apple's Safari browser. This will create an opportunity for Apple to integrate Perplexity's conversational AI to compete in the evolving search market. Cramer further called out Apple on its buyback program and said that "Continued buybacks will do nothing." This comes as Apple spent the most on stock buybacks in 2024. During its second quarter earnings, the company also said its board authorized an additional share repurchase program of up to $100 billion. See Also: Nvidia Is 'On A March To $5 Trillion' Market Capitalization, Says Dan Ives As He Predicts Bullish Environment For Tech And Crypto: 'Very Strong Second Half' Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Why It Matters: Apart from Cramer, Dan Ives has also stated that Apple should buy Perplexity AI on multiple occasions. He said at the beginning of July that Apple's "treadmill approach" needs to end, and it needs to eye a big, splashing partnership with either Perplexity or Anthropic. "Look, it's about the developers. If you look at OpenAI, if you look at Google, if you look at Microsoft, they (Apple) need to get into the game. That is something that can't be done in Cupertino," said added. Price Action: Shares of Apple were up 0.23% in premarket on Wednesday. It has fallen by 14.25% on a year-to-date basis and 10.95% over the past year. Benzinga Edge Stock Rankings shows that Apple had a weaker price trend over the medium and long term but a stronger trend over the short term. Its momentum ranking was poor, and its value ranking was also bad at the 9.40th percentile. The details of other metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Wednesday. The SPY was down 0.051% at $621.82, while the QQQ declined 0.22% to $555.52, according to Benzinga Pro data. Read Next: Nvidia's China Revenue 'Is Far From Gone', But It Outmaneuvered US For Rare Earth In Exchange For AI Chips, Says Craig Shapiro Image via Shutterstock Market News and Data brought to you by Benzinga APIs

Apple Investors Lobbying for Big Acquisition Amid AI Troubles | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. As Bloomberg News reported Monday (July 14), investors are concerned by a slump in share prices that has wiped out more than $630 billion in Apple's market value this year and frustrated with the company's delays in introducing artificial intelligence (AI) features. To that end, these investors are calling on the tech giant to buck tradition and acquire or hire new AI talent. "Historically Apple does not do big mergers and acquisitions," said Citigroup analyst Atif Malik, adding that its last major deal was its $3 billion purchase of Beats in 2014. Still, "investors would turn more positive if Apple could acquire or invest a meaningful stake in an established AI provider," he said. As Bloomberg notes, Apple's shares have dropped 16% this year, while traders have flocked to rivals like Meta, which is spending heavily on its AI efforts. The report adds that although Apple faces issues such as tariffs and regulatory headaches, disappointment in its AI efforts has become a major pain point for investors. There are signs, the report continued, that Apple may be changing its tune on big acquisitions, with recent news that the company had discussed purchasing AI startup Perplexity AI, a move that would Apple develop an AI-based search engine. Dan Ives, an analyst at Wedbush, called buying Perplexity a "no brainer," and said even if the company paid $30 billion, that figure would be "a drop in the bucket relative to the monetization opportunity Apple can achieve on AI." PYMNTS examined Apple's AI troubles last month following the company's debut of AI features at its 2025 Worldwide Developers Conference (WWDC). "Apple, long known for excitement and innovation, delivered nothing particularly exciting or innovative during the first day of the WWDC," that report said. In terms of an upgrade to the long-standing Siri AI voice assistant, Apple Senior Vice President of Software Engineering Craig Federighi said the company needed "more time to meet our high-quality bar." This restrained tactic contrasts with rivals like Amazon, Google and Microsoft, which are embracing large language models (LLMs) and enterprise-scale AI solutions "in aggressive and sometimes experimental ways," PYMNTS added. "While those companies are deploying AI agents in business software and cloud infrastructure, Apple is offering tightly integrated, narrowly scoped capabilities such as real-time voicemail transcripts, enhanced Spotlight search, call screening and translation," the report continued.