Apple's AI Strategy: Catching Up in the Race or Falling Behind?

Apple's BlackBerry Moment Looms, 3 Bold AI Moves, Warns Dan Ives - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

It's been a rare good week for Apple Inc AAPL bulls. A $100 billion U.S. manufacturing splash earned CEO Tim Cook some political goodwill and helped clear tariff fog -- yet Wedbush's Dan Ives has a stark warning for the iPhone maker. * Track AAPL stock, here. 's stunning absence from is detrimental. What Happened: Big tech is zipping around the AI track like an F1 car in Monza, Ives says. Apple, however, is "on a park bench drinking lemonade." With 2.4 billion iOS devices in play, Apple should be leading the AI charge. Instead, the smartphone innovator has a "black cloud" over its stock, Ives says. An "invisible AI strategy" has essentially created a "Blackberry Moment" for Cook, he added. Read Also: Buffett's Apple Bet Just Got A $100 Billion US Tailwind Three Things Cook Must Do -- Fast To avoid being left in the digital dust, Ives lays out a three-part rescue plan: * Buy Perplexity -- The AI search engine is "a drop in the bucket" at $30 billion, but could supercharge Siri and reposition Apple in the AI space. * Hire Real AI Talent -- Apple's management team needs a shake-up. "Back to the Future" vibes won't cut it anymore. * Partner With Google Gemini -- OpenAI isn't the answer, Ives insists. Despite regulatory hurdles, making way for Alphabet Inc's GOOGL GOOG Google Gemini's deep integration could be Apple's best bet. Ives still sees Apple as an Outperform with a $270 target, but warns that time is not on Cook's side. "It's time to take some big shots," he says -- or risk being benched forever. Image: Shutterstock AAPLApple Inc $221.050.46% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum 35.26 Growth 28.69 Quality 73.82 Value 9.22 Price Trend Short Medium Long Overview GOOGAlphabet Inc $198.000.36% GOOGLAlphabet Inc $197.290.39% Market News and Data brought to you by Benzinga APIs

Apple's In F1 Race While Tim Cook Sips 'Lemonade' On 'Park Bench' -- Dan Ives Warns AI Misstep Could Stain His Legacy - Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

Wedbush Securities' Dan Ives has warned that Apple Inc.'s AAPL failure to innovate in artificial intelligence could tarnish CEO Tim Cook's legacy, as other tech giants race ahead in the AI revolution. Dan Ives Highlights Apple's Urgent AI Crisis On Friday, Ives, global head of technology research at Wedbush Securities, raised a critical alarm on CNBC's Fast Money regarding Apple's lack of progress in the AI sector. Describing the current situation as a "BlackBerry moment," Ives warned that Apple's failure to keep up with the rapid advances in AI could severely harm the company's prospects. "Everything that we see in big tech across the board it's an F1 race passing them by. And Apple is essentially in Cook on a park bench drinking lemonade," Ives stated. He then spoke about Apple CEO's leadership. "I think Cook should be CEO. We believe he's been a Hall of Fame CEO and should continue to be, but it will tarnish his legacy and the Apple future if they miss out on the fourth Industrial Revolution," the analyst said. See Also: Jim Cramer Says Tariffs Will Become A 'Build-In Cost For Companies' As Caterpillar Takes Hit Amid Mixed Q2 Apple's Missed Opportunities In AI He pointed out that Apple's current AI strategy lacks visibility and innovation, leaving the company trailing behind competitors like Microsoft Corporation MSFT, Alphabet Inc.'s GOOG GOOGL Google and Nvidia Corporation NVDA, which are aggressively advancing in AI. The biggest issue is that Apple's AI strategy is essentially invisible right now, Ives said, adding that without a significant shift, Apple risks becoming irrelevant in the AI race, especially with other tech giants pulling ahead. Ives' Three-Part Plan To Save Apple Ives earlier highlighted that despite Apple's massive 2.4 billion iOS devices in play, the company is not capitalizing on its lead in consumer technology. To turn things around, Ives proposed a three-step plan for Apple to regain its footing in the AI space: Acquire Perplexity: A $30 billion AI search engine, Perplexity, could help Apple improve Siri and other AI functions. Hire AI Talent: Apple needs to bring in real AI experts to refresh its management team. Partner With Google's Gemini: Instead of relying on OpenAI, Ives suggested that Apple should integrate Google's AI system, Gemini, to stay competitive. Apple's Financials And Future Outlook Despite the concerns, Apple in July reported strong third-quarter earnings, with $94 billion in revenue and $44.58 billion in iPhone sales. However, Ives stressed that without a clear AI strategy, Apple's stock may face limitations in growth. The company has until the end of 2026 to redefine its AI strategy, according to other analysts like TD Cowen, who also warned about the risks of failing to act quickly. Price Action: Apple Inc. shares rose 4.24% on Friday, closing at $229.35, according to Benzinga Pro. Benzinga's Edge Stock Rankings show that AAPL maintains an upward trend in the short and medium term, while trending downward over the long term. Additional performance details are available here. Read Next: Dow Jones Breaks 43,000, Palantir Hits New Record Highs: What's Driving Markets Wednesday? Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Ringo Chiu on Shutterstock.com AAPLApple Inc$229.964.51%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum35.26Growth28.69Quality73.82Value9.22Price TrendShortMediumLongOverviewGOOGAlphabet Inc$202.462.63%GOOGLAlphabet Inc$201.752.66%MSFTMicrosoft Corp$523.000.41%NVDANVIDIA Corp$182.831.14%Market News and Data brought to you by Benzinga APIs

Apple's New Artificial Intelligence (AI) Strategy Could Be a Genius Move | The Motley Fool

CEO Tim Cook revealed a potential path to becoming competitive in the AI arena. It's no secret that Apple (AAPL 4.24%) has been a laggard in the artificial intelligence (AI) arms race. It has been outpaced every step of the way by its Android competitors. Additionally, the gap only seems to be getting wider and wider. However, Apple may be implementing a new strategy that could be a genius move. On the conference call for the fiscal third quarter of 2025, ended June 28, Apple CEO Tim Cook commented about the company's new AI strategy, and it may be enough to vault Apple from an AI laggard to an AI leader. During Apple's quarterly conference call, Cook said Apple is open to acquiring an AI company. If it acquired an AI leader, then it could rapidly accelerate its development pace. He also mentioned that it's not focused on a specific size, which could indicate management could be going after one of the larger generative AI companies. Some of the businesses on the short list that Apple could acquire are OpenAI, Perplexity, and Anthropic. These three tend to be among the best generative AI models that aren't already associated with a parent company (like xAI's Grok or Google's Gemini). However, an acquisition for these wouldn't come cheap. All three of these companies are currently private, so we have relatively limited data to establish the value of the company. According to the most recent reports for each company, OpenAI was last valued at $300 billion, Anthropic at $170 billion, and Perplexity at $18 billion. At the end of Q3, Apple's cash and short-term investments totaled over $55 billion. So, while it could probably flex its muscle and scoop up OpenAI or Anthropic at an extreme price tag, an acquisition of a company like Perplexity is probably more likely. This also would make the most sense, as OpenAI is currently partnered with Microsoft and Anthropic is linked to Amazon. With Perplexity's relatively low valuation compared to its peers, Apple could scoop it up in an all-cash deal and immediately be in a great position in the AI arms race. I wouldn't be surprised to see a deal like this get announced within the next year, and it may not be with Perplexity; it could be with another generative AI competitor. However, I think this route is likely as Apple has already fallen well behind its peers in this realm. But the question is, does Apple need AI to sell its products? During Q3, Apple did something it hasn't done in some time: produce double-digit revenue growth (as long as you round up). Apple has been stuck in a rut since 2022, and now it's finally showing some signs of life, despite having little AI featured compared to its peers. The question then becomes: Do AI features matter to consumers? This could be a hotly debated topic, as most users likely aren't using the AI capabilities of Android phones, and Apple users may not care. But there could be a time someday when users are comfortable using AI features, and the specific AI model on a phone becomes a huge selling point. We're not there yet, so Apple still has some time to catch up in the AI arms race. However, we'll reach that point eventually, and if Apple doesn't do something major, like acquire an AI company, it could be left in the dust over the long term, even if it isn't feeling the pain right now. I think Apple's new strategy could be genius if it makes a move to acquire a company like Perlexity, and the entire investment thesis surrounding Apple would improve overnight. But if it fails to do so, Apple could be on the outside looking in a few years from now.

Apple's AI Momentum Is Building -- Here's What It Means for Investors | The Motley Fool

Apple plans to ramp up investments to catch up in AI developments. Apple (AAPL 4.24%) has long been one of the premier stocks on the U.S. stock market, spending most of the past decade as the world's most valuable public company. However, the company has seemingly taken a step back in the past few years as the artificial intelligence (AI) boom has boosted the value of many other big tech companies. In the past three years, Apple's stock is only up around 30%, making it the second-worst performer of the "Magnificent Seven" stocks (trailing only Tesla) and underperforming the S&P 500. That's not something investors are used to seeing from Apple. Despite Apple seemingly lagging behind, there could possibly be a breath of fresh air coming to the company, sparking new life into the stock. Apple's fiscal third-quarter earnings, for the period ended June 28, were a pleasant surprise for many people. Its revenue grew nearly 10% year over year to $94 billion, which is a June quarter record for the iPhone maker. And speaking of iPhone, the smartphone's revenue grew 13% year over year to $44.6 billion, which Apple noted was driven by the popularity of the iPhone 16 family. Mac (which includes products like MacBook Pro, MacBook Air, iMac, and Mac Studio) revenue grew 15% year over year to $8 billion, but iPad and wearables, home, and accessories sales were noticeably down -- 8% and 9% year over year, respectively. Still, Apple's hardware revenue grew by 8% year over year and accounted for nearly 71% of its total revenue for the quarter. Apple's services segment reached an all-time high, bringing in $27.4 billion, but hardware remains -- and will likely remain -- king for the company. Apple's year-over-year revenue growth was its highest in the past three years. The big cloud hanging over Apple's business has been AI (what it calls "Apple Intelligence"), and the lack of urgency in the space compared to rivals like Alphabet and Microsoft. It seems Apple is beginning to take it more seriously and address this issue. A major advantage on Apple's side is the number of devices it has in people's pockets, homes, and offices. Ideally, Apple can integrate AI into its various hardware, giving people even more of a reason to choose it over competitors. This has been the plan for a while, but it hasn't gone as smoothly or as quickly as most people thought or hoped. That should change soon, with Apple's management noting on its latest earnings call that Apple is "increasing [its] investment significantly in AI," both in infrastructure and company personnel. In its latest quarter, Apple spent nearly $3.5 billion on capital expenditures, its most since its fiscal quarter that ended in January 2023. Apple has always moved cautiously and with intention. These new AI investment developments don't strike me as the company just now coming to its senses, but more so Apple feeling like now is the right time (a lagging stock price sure helps it come to that realization). At the time of this writing, Apple is trading at 29 times its projected earnings for the next year. That's the second-lowest out of the "Magnificent Seven" stocks and below the 35 it was at to start this year. That alone doesn't make Apple a buy right now, but it does give it a lot more upside now than before. This is especially true if its new AI prioritization plays out as management envisions. With $133 billion in cash and marketable securities to its name, Apple has all the resources it needs to ensure it keeps pace in the AI race.

Apple's Silence on AI Glasses and Deals: Strategic Genius or Warning Sign for Investors? | The Motley Fool

Apple's management isn't saying much about two areas of intense interest to its investors. Is Apple (AAPL 4.24%) an underdog? That might seem like a silly question to ask about a company with a market cap of roughly $3.3 trillion and sales that will almost certainly top $400 billion this year. However, many investors view Apple as an underdog in a critical arena: artificial intelligence (AI). Rumors have floated recently, though, that Apple could be investing heavily in developing AI glasses and is considering a major AI-related acquisition. The company could probably nip investors' concerns if it played up either story. However, Apple's executives remain largely silent on its AI glasses strategy and any acquisition plans. Is that strategic genius on management's part or a warning sign for investors? Citi analyst Atif Malik gave Apple CEO Tim Cook a great opportunity to comment on the company's AI glasses strategy during Apple's fiscal 2025 third-quarter earnings call on July 31. He first noted the momentum that Meta Platforms and Xiaomi are enjoying with their AI glasses. Malik then asked Cook if Apple was considering using the technology from its Vision Pro mixed-reality headset in other devices. Did Cook hit the ball out of the park with his response? For many investors, it was more like a swing and a miss. He first praised the latest release of visionOS, the operating system for Vision Pro. All Cook would say about the future of Vision Pro, though, is that the company is still "very focused on it." He added, "I don't want to get into the roadmap on it, but this is an area that we really believe in." Malik was also the only analyst on the call to bring up potential AI-related acquisitions. Addressing his question to Apple CFO Kevan Parekh, he asked, "Do you feel like you need to accelerate your AI roadmap or just keep the organic focus?" Cook jumped in to reply instead of Parekh. He noted that Apple had acquired seven companies in 2025 already, although not all of them were related to AI. Anyone hoping for a hint that Apple was on the verge of a significant AI deal, however, was probably disappointed. To be fair, Cook did state: "We're very open to M&A [mergers and acquisitions] that accelerates our roadmap. We are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature." But he quickly added that management didn't "have anything to share specifically today." Is Apple really behind several other technology giants in the AI race? I think the answer is clearly "yes." The generative AI features in Apple Intelligence weren't as impressive as many investors expected. The delays in launching an update for Siri have also been embarrassing for the company. However, I wouldn't say that Apple's silence on its development plans for AI glasses or the possibility of AI-related acquisitions is a warning sign. The company has historically said very little about products in development until they're nearly ready to roll out. And staying quiet on potential business development deals is prudent, especially if there's a possibility that another big player could enter the picture. On the other hand, I wouldn't necessarily call Apple's approach a brilliant strategy. In particular, it wouldn't hurt to at least acknowledge that developing new AI devices, such as glasses, was on the product roadmap. Cook and his team are almost certainly aware of what other tech CEOs are saying. For example, Meta's Mark Zuckerberg has unabashedly proclaimed that glasses are "the ideal form factor for AI." Sundar Pichai, who is CEO of both Google and its parent, Alphabet, said in his company's latest quarterly update that Google is "super excited about our investment in glasses" and referred to the devices as "an exciting new emerging category." If Cook made similar comments, it wouldn't harm Apple's development plans. However, I suspect it would calm the nerves of some jittery investors. What will Apple do regarding AI glasses and deals? I have three predictions. First, the company will, as rumored, develop AI glasses. The first version of those glasses will be comparable to the Ray-Ban Meta AI glasses, in my view. But I expect Apple to integrate the AI glasses with iPhone along the lines of what it has done with Apple Watch. That would be a smart strategy because it could boost iPhone sales. Second, I don't look for Apple to make a huge AI acquisition. Just because Cook said that Apple isn't "stuck on a certain size company" doesn't mean he's willing to spend too much. The most Apple has ever spent on a deal was $3 billion for the purchase of Beats. I predict that the company won't acquire Perplexity, for example, which was recently valued at around $18 billion and would likely cost a lot more for Apple to buy. My third prediction is the one I'm most confident about: Apple won't be an AI underdog forever. The company's fortunes hinge too much on the technology.

Could Apple Be Gearing Up for a Big Acquisition? | The Motley Fool

Apple (AAPL 4.24%) has been a tremendous stock to own for decades. But lately, it's been falling behind its competitors. Artificial intelligence (AI) has been a hot theme for tech in recent years, and Apple has been taking a slow and perhaps overly conservative approach to deploying next-gen technologies for its iPhones. Investors haven't been pleased with the strategy, and the stock has been doing poorly in what's otherwise been a strong year for the markets. As of the end of Aug. 7, the stock was down more than 12% from the start of the year, while the S&P 500 has risen by nearly 8%. But there have been whispers and signs that the company may be looking to appease investors and make a big move, one that could help it catch up to its rivals in AI. Could a big acquisition be on the horizon for Apple? There are so many chatbots and AI-powered products and services in the market these days that it can be difficult to keep up. Apple has been playing catch-up, and while it has been introducing AI features for its iPhones, it delayed some until next year, particularly for its Siri assistant. The problem is that by then, it risks falling even further behind its rivals. But the company does have substantial resources it can put toward a big acquisition to bolster its strategy. As of June 28, the company's cash and marketable securities totaled more than $55 billion. And over the past nine months, it has generated nearly $82 billion in cash from its day-to-day operating activities. CEO Tim Cook recently said that the company may be willing to put that money to work and that he's open to mergers & acquisitions (M&A). "We're very open to M&A that accelerates our roadmap," he said. And what was particularly noteworthy was that he may have hinted that even a large deal may be a possibility, stating that "we are not stuck on a certain size company." Earlier this year, there were rumors that the company was looking into acquiring Perplexity, which has a popular chatbot and would equip Apple with a load of AI talent. While nothing has materialized and nothing may come of it, a move like that could certainly help Apple win over AI investors. Apple has a robust business, a vast ecosystem of products and services, and more than 1.5 billion active iPhone users around the globe. And don't forget its massive cash flow. The company is by no means in imminent danger. The company has been taking it easy in recent years and has typically been cautious in its growth, opting to make small, incremental changes to its iPhones rather than big, revolutionary ones. But I think that's because it hasn't had to do that or worry about that. Its users are entrenched in the Apple ecosystem, where it isn't easy to just switch to another provider, as doing so would be a significant undertaking. With AI, however, management may finally be pushed to be a bit more aggressive. And even if it's behind the competition right now, all it takes is one big move or acquisition to change that. I wouldn't worry about Apple in the long run, as the business still looks phenomenal, and with deep pockets, it has plenty of options it can consider. A big acquisition for Apple may or may not happen, and it's risky to invest based on rumors. But as one of the world's largest and most iconic tech companies, this still looks like a good stock to invest in for the long haul. At more than 30 times its trailing earnings, it isn't all that cheap. And it may be a volatile road ahead for the company, as it has to worry about tariffs. A slowdown in the economy could impact demand for its products as well. But if you're looking for a stock to invest in for the long term (e.g., 10-plus years), Apple can be a great option to consider.

Apple: Wedbush wants to avoid a 'Blackberry' scenario

Wedbush Securities on Friday reiterated its "outperform" rating and $270 target price for Apple shares, while saying that the tech giant will have to make three important decisions to avoid becoming the "Blackberry" of the AI erna. Noting the lack of progress made in this area by the Cupertino-based group, the broker notably explains that Apple will (1) have to buy Perplexity, and quickly, emphasizing that this AI-based search engine could transform its strategy by enabling it to improve Siri's features with technology considered to be among the best on the market. 'Even if it costs more than $30b, it would be a small price to pay given the potential revenue that AI could bring to Apple," Wedbush said. According to the broker, Apple will also have to (2) recruit external AI talent given its recent lack of innovation, with AI experts from other companies helping to change the internal culture and stimulate creativity. Finally, Wedbush believes that Apple will have to team up with Google to fully integrate its AI tool called "Gemini" into the iPhone, given that OpenAI is unlikely to be a viable long-term partner. "Betting on Gemini could greatly improve the AI features offered to Apple users," it concludes