Apple's $640B AI Wake-Up Call: Investors Demand Bold Moves Or Risk Falling Behind
Apple’s shares have fallen 16 percent this year amid investor dismay over delayed AI rollout. Analysts call for bolder moves, including a major acquisition and ramped-up hiring.
Apple is facing mounting pressure from investors after its share price fell by around 16 per cent this year, wiping out more than $640 billion in market value. The decline reflects growing frustration over the slow pace of AI feature rollout and a traditionally cautious acquisition strategy. According to analysts cited by Bloomberg, Apple must pivot towards more aggressive action, either by acquiring a well‑regarded AI firm or significantly expanding its in‑house talent pool.
Last year’s Worldwide Developers Conference introduced AI initiatives like Apple Intelligence and updates to Siri. However, these have been delayed, and the market response has been muted. Apple remains historically reluctant to pursue substantial mergers, with its last major acquisition being Beats in 2014. As a result, critics argue that the company is falling behind competitors like Meta and Nvidia, who are making headlines with bold AI investments.
Investors Want A Major Move
According to Citigroup analyst Atif Malik, cited by Bloomberg, Apple has historically stayed away from big-ticket mergers, with its last significant acquisition being Beats for $3 billion back in 2014. However, Malik believes the company’s stance may now need to change: “Investors would turn more positive if Apple could acquire or invest a meaningful stake in an established AI provider.”
The report suggests Apple executives have internally discussed acquiring Perplexity AI, a rising search-focused startup valued at $14 billion. According to Dan Ives of Wedbush, even if Apple spends $30 billion, it would still be “a drop in the bucket relative to the monetisation opportunity Apple can achieve on AI.”
Competitors Pulling Ahead
While Apple struggles to showcase compelling AI tools, rivals like Meta Platforms are moving full steam ahead. Bloomberg reported that Meta recently hired the engineer leading Apple’s AI model team, offering a pay package in the hundreds of millions of dollars, one Apple did not try to match.
Meta has also made a $14.3 billion investment in Scale AI, underlining its aggressive AI push. These moves have left Apple appearing overly cautious in comparison.
Internal Changes And A Wake-Up Call
Apple is also undergoing internal shifts. Chief Operating Officer Jeff Williams is retiring, and former CFO Luca Maestri stepped down last year. While CEO Tim Cook remains in charge, LightShed Partners analysts Walter Piecyk and Joe Galone wrote, “Missing on AI could fundamentally alter the company’s long-term trajectory.”
Analyst Paul Meeks echoed the call for transformation: “A significant deal would not only help them in AI, but show it is committed to a culture change and course correction. It can’t do AI on its own.”
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