A Wall Street analyst advises caution on Apple stock due to the company’s unclear artificial intelligence strategy, particularly in generative AI. Needham’s Laura Martin warns that Apple risks lagging behind Big Tech competitors if it doesn’t clarify its AI approach, potentially jeopardizing Tim Cook’s job.
Patrick Seitz for Investor’s Business Daily:
“Apple must articulate a GenAI action plan,” Martin said in a client note Friday. “Apple is 1-2 years behind its Big Tech competitors, so any GenAI plan will be expensive to catch up through higher costs to the P&L and higher capex, and maybe even an acquisition.”
Further, if it doesn’t act, tech talent will leave Apple to work for big players in artificial intelligence such as Meta Platforms, OpenAI, Anthropic and others, she said.
“We believe that Apple’s share price will fall once investors understand the investment levels required to catch up with the other Big Tech conglomerates that were early adopters of GenAI,” Martin said.
Lack of a clear AI strategy could even cost Chief Executive Tim Cook his job, she said.
“Press and Wall Street’s calls to replace Tim Cook as Apple CEO are getting louder every quarter that Apple doesn’t lay out a comprehensive GenAI strategy,” Martin said. “With Apple shares down 14% year to date (vs S&P 500 up 8%), it’s clear to us that investors are insisting that Apple get off the sidelines.”
MacDailyNews Take: Not loud enough, yet.
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