Apple Stock: As Microsoft and Google Dominate the Conversation, Apple Remains Silent on AI

Apple Stock

Apple Stock (NASDAQ:AAPL)

Many are completely perplexed by what Apple did this past week.

No, it is not about the company’s $3,499 virtual reality headset, the Vision Pro, which won’t be made public until sometime in 2024. (However, there are also some perplexing aspects of that launch, which I’ll discuss in a moment.)

What baffles many is how Apple (NASDAQ:AAPL) managed to deliver a keynote that lasted more than two hours without uttering the phrase “generative AI.”

Cisco Systems unveiled new AI features in its WebEx communications software this past week, Intuit revealed a potentially game-changing AI strategy, and Adobe revealed plans to start charging businesses who use Firefly, the company’s expanding suite of generative AI tools.

To be clear, Apple is not required to aggressively promote its stock through overly enthusiastic AI predictions. With a market value of almost $3 trillion, it is the biggest American corporation. The stock has recently traded at all-time highs and is up 37% year to date. Additionally, Apple already makes use of AI for some features, such as auto-correction and predictive typing, both of which were briefly mentioned during this past week’s keynote address. What, however, is Apple’s overarching AI plan? Do they not require one?

The following 15 or so tech titans, ranked by market value, have all developed comprehensive strategies to take advantage of the AI trend: Both Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) have chatbots and have announced plans to incorporate AI features into the majority of their application software. For Amazon Web Services, (NASDAQ:AMZN) is developing AI tools.

The stock of Nvidia (NASDAQ:NVDA) has increased by 160% this year thanks to its AI-friendly chips, and it recently crossed the $1 trillion market cap threshold. Then there are the various AI plays, including Tesla (NASDAQ:TSLA), Meta Platforms (NASDAQ:META), Taiwan Semiconductor Manufacturing (NYSE:TSM), Broadcom (NASDAQ:AVGO), and Oracle (NYSE:ORCL).

The Significance of AI in Today’s Technological Landscape

AI has emerged as a transformative technology, enabling machines to simulate human intelligence and perform complex tasks with remarkable efficiency. It has found applications in various domains, including healthcare, finance, education, and entertainment. By leveraging AI, companies can unlock new insights, automate processes, and deliver personalized experiences to their users.

Microsoft’s Dominance in AI

Microsoft has made significant strides in AI research and development, positioning itself as a leader in the field. With its Azure cloud platform, Microsoft provides a robust infrastructure for AI applications, empowering developers and businesses to leverage AI capabilities easily. Furthermore, Microsoft’s cognitive services, such as speech recognition, image recognition, and natural language processing, have gained widespread adoption.

Google’s Influence in the AI Sphere

Google, known for its prowess in data analytics and machine learning, has also established itself as a dominant force in AI. Through products like Google Assistant, Google Translate, and Google Photos, the company has brought AI-powered experiences to millions of users worldwide. Google’s research advancements and commitment to open-source frameworks like TensorFlow have contributed significantly to the growth of the AI community.

In the meantime, it has been close to 12 years since Apple introduced its virtual assistant, Siri. Though it appears to be growing slowly.

This may be complicated by Apple’s long-standing search partnership with Google, which pays the company billions of dollars annually to continue serving as the default search engine on the iPhone. Or perhaps the launch of the Vision Pro has kept the company too busy. Or perhaps Apple is working on a brilliant project that hasn’t yet launched or leaked.

The Implications of Apple’s Silence on AI

Apple’s reluctance to engage in public discussions about AI could have both short-term and long-term implications. In the short term, Apple’s silence may lead to a perception that they are falling behind their competitors. This perception could potentially impact consumer confidence and investor sentiment.

Investors will start to worry that Apple is missing out on the biggest technological advancement since the iPhone if it doesn’t soon announce an AI strategy.

Okay, let’s return for a second to the Vision Pro. The price was higher than Wall Street anticipated, and the launch date was later than anticipated, as has been widely discussed. Even Dan Ives of Wedbush Securities, who is arguably the biggest proponent of Apple on Wall Street, believes that the company will only sell 150,000 units in the first year and one million in the following year after lowering the price.

In either case, it’s insufficient. Apple’s annual revenue is around $400 billion. The sale of $20 billion in Vision Pro hardware annually would be required for it to be significant—let’s say a 5% increase in revenue. That would be just under six million units at the current price. A little under $8 billion was spent on virtual and augmented reality headsets in 2022. The long-term change would not be possible even if the market doubled and Apple absorbed all of it, forcing market leader Meta’s Quest unit out of business. Here, Apple is engaged in a protracted game.

While Microsoft and Google continue to dominate the conversation on AI, Apple’s silence should not be misconstrued as a lack of interest or commitment to this transformative technology. Apple has a history of surprising the world with its innovative products and features, and its approach to AI could be no different. By silently investing in AI research, strategic acquisitions, and focusing on user privacy, Apple may be laying the groundwork for its next big AI breakthrough. As the AI landscape evolves, it will be interesting to see how Apple’s silent approach unfolds and whether it can disrupt the conversation with its unique perspective.

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