Is Apple making the identical errors as Blackberry? Here’s the way it can change course.

By Britney Nguyen

Apple appears to be missing imaginative and prescient round AI, however one analyst recommends the corporate make a splashy acquisition and pay up for prime AI hires

Apple’s inventory has seen good points this week after it introduced a further funding within the U.S.

Apple Inc.’s inventory may see its largest weekly achieve in over 5 years, however the firm nonetheless cannot shake the notion that it is missing in innovation.

Wedbush analyst Daniel Ives even went as far to recommend that Apple’s (AAPL) “invisible AI strategy” may create a “Blackberry Moment” for the corporate and its chief government, Tim Cook. He worries Apple is resting on its laurels because the artificial-intelligence wave grips Silicon Valley.

The comparability is maybe a bit tongue-in-cheek. Blackberry Ltd. (BB) peaked with a $83.5 billion market capitalization in 2008, in accordance with Dow Jones Market Data, and Apple was already about twice its measurement on the time. Now Blackberry is value $2 billion, having missed out on altering traits in smartphones, and Apple is value $3.3 trillion.

But Apple actually would not seem to be one of many frontrunners within the “AI revolution,” which Ives mentioned is being led by Big Tech friends akin to Alphabet Inc.’s (GOOGL) (GOOG) Google and Microsoft Corp. (MSFT) which are “focused on monetizing the biggest tech trend in the last 40 years.” Meanwhile, “Apple is on a park bench drinking lemonade watching this technology innovation change the world.”

And Apple has a bonus to compete, Ives famous, because it has “the biggest consumer installed base in the world,” with 2.4 billion iOS units and 1.5 billion iPhones getting used globally. The firm simply is not correctly capitalizing on its property, in his view.

“It’s crystal clear AI innovation is not happening within the walls of Apple Park from the lack of innovation and constant loss of AI talent out the doors,” Ives wrote.

Ives laid out three recommendations for the corporate to show it isn’t a “melting ice cube” in relation to AI.

First, he thinks Apple ought to purchase AI search-engine startup Perplexity “before it’s too late.” That may assist the corporate “redefine” its AI technique and enhance its Siri voice assistant. Apple has struggled by itself to boost Siri with smarter AI options.

Perplexity, in the meantime, has “some of the most impressive” AI algorithms and know-how within the business, Ives mentioned. Apple might need to pay $30 billion or so to get a deal accomplished, in his view, however that cash could be “a drop in the bucket relative to the monetization opportunity Apple can achieve on AI.”

See extra: Apple was one of many few shares down Tuesday. Why buying Perplexity could possibly be key.

On Apple’s earnings name earlier this month, Cook did not shrug off the potential for an AI acquisition sooner or later. He mentioned that Apple has acquired seven smaller firms to date this yr – not all AI-focused – however it would not have a selected measurement in thoughts when contemplating offers.

“We basically ask ourselves whether a company can help us accelerate our roadmap,” Cook mentioned in response to an analyst’s query. “If they do, then we’re interested.”

Ives additionally thinks Apple ought to concentrate on attracting AI expertise and administration, “even though Apple will have to pay up to bring in technology executives from the outside.” While Ives is assured that Cook will proceed to guide the corporate till no less than 2030, he thinks Apple must make modifications within the ranks beneath him.

And regardless of the U.S. Justice Department’s search-monopoly case in opposition to Google – which can decide whether or not Apple can proceed accumulating hefty funds from Google for distinguished search placement – Ives thinks the 2 firms ought to deepen their relationship in one other method. Apple “needs to fully integrate Google’s Gemini AI into its iPhone ecosystem,” he wrote, since ChatGPT maker OpenAI is much less prone to be a future companion for Apple.

“Time is not on Apple’s side and they need to take some big shots now and doubling down on the Google partnership is the right move,” Ives mentioned. “This would be the right strategic bet despite regulatory scrutiny” on the connection between the 2 firms in search.

Wedbush has an outperform ranking on Apple’s inventory, which was up 4.4% in noon motion Friday. Shares are up 13.5% on the week and heading for his or her greatest weekly efficiency since July 2020.

The current momentum has much less to do with a altering view of the corporate’s AI positioning and extra to do with the perceived easing of trade-war tensions. Apple introduced a $100 billion funding in U.S. manufacturing earlier this week, which may assist alleviate Wall Street’s considerations the affect of tariffs on the corporate.

See extra: Apple’s inventory good points as new announcement with Trump may assist its tariff downside

-Britney Nguyen

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  08-08-25 1305ET
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