Wall Street Mounts Pressure on Apple To Get in the AI Race

Apple’s long-standing image as a tech trailblazer is now facing one of its most serious credibility tests in years. As generative artificial intelligence reshapes the future of computing, the Cupertino giant is under pressure to make a defining move—or risk being permanently left behind.

Analysts say Apple has failed to match the pace of its peers in building or acquiring advanced AI capabilities. While rivals like Microsoft and Google have poured tens of billions into AI research, cloud infrastructure, and landmark acquisitions, Apple has remained tight-lipped, offering only incremental updates to Siri and vague promises through its “Apple Intelligence” initiative.

“The incomplete AI strategy is still the biggest overhang, but we think Apple still has approximately 1.5 years to effect a compelling solution,” TD Cowen analyst Krish Sankar wrote in a note on Monday. He recommends buying the shares.

This silence has unnerved investors. The company’s stock has dropped more than 15% in 2025, making it the second-worst performer among the tech-heavy “Magnificent Seven,” outpaced only by Tesla. The anxiety has prompted growing calls from Wall Street for Apple to make a bold play, starting with a strategic acquisition of Perplexity AI, one of the fastest-rising competitors to OpenAI’s ChatGPT.

Perplexity, a startup known for its speed, accuracy, and a radically simple user interface, has emerged as a breakout player in the AI assistant space. Its ability to offer real-time answers backed by verifiable sources has attracted millions of users, some of whom have turned away from more established tools like ChatGPT, Gemini, and Claude.

Dan Ives, managing director at Wedbush Securities and one of Apple’s most vocal supporters, believes a Perplexity acquisition would be a transformative move. He has repeatedly called on Apple to make the leap.

“We believe Apple needs to acquire Perplexity for AI capabilities,” Ives said earlier this month. “A likely $30 billion range would be a no-brainer deal given the treadmill AI approach in Cupertino. Perplexity would be a game changer on the AI front and rival ChatGPT given the scale and scope of Apple’s ecosystem.”

Ives doubled down on Wednesday, just ahead of Apple’s quarterly earnings report, calling the company’s AI direction “invisible” and warning that its current posture is unsustainable:

“Heading into Apple’s earnings tomorrow, the elephant in the room continues to be Apple’s AI growth strategy, which right now is invisible, while the rest of the tech world is laser-focused on monetizing the biggest tech theme in 40 years—the AI Revolution,” he said.

“It’s becoming crystal clear that any innovation around AI at Apple is not coming from inside the walls of Apple Park. Importantly for the Street, we estimate the AI monetization strategy at Apple could be worth up to $75 per share—and time is ticking for Cook to figure this out.”

Apple’s AI Moves So Far: Too Little, Too Late?

Earlier this year, Apple unveiled its “Apple Intelligence” framework, promising smarter Siri capabilities, writing suggestions, and integration with apps like Mail and Notes. But the reaction was tepid, and perhaps more damaging was Apple’s own admission that the upgraded Siri won’t be fully ready until 2026. That means its most ambitious AI features will not appear in this year’s iPhone 16 lineup, leaving it with no blockbuster selling point.

This comes as Alphabet’s Gemini assistant is already embedded into Android 16, giving users an AI-powered experience with deep integrations across Google’s services—from Maps and Gmail to YouTube and Calendar. Microsoft’s Copilot and Meta’s Llama-based assistants have also found homes across devices and apps, from PCs to smart glasses.

Apple, in contrast, has remained stuck in its product cycle rhythm, focused on polishing hardware while failing to establish a compelling AI strategy. Even its most notable moves in the space, such as investing in AI startups and training foundation models behind closed doors, have yet to yield any widely adopted breakthrough.

The Threat from Outside—and Inside

The urgency isn’t just about catching up with Big Tech. Former Apple design chief Jony Ive, in partnership with OpenAI, is developing an entirely new AI-native consumer hardware product under a company called “IO,” acquired by Sam Altman’s team for $6.5 billion. That move is being viewed by many as the clearest threat to the smartphone’s dominance since its inception.

OpenAI’s rumored plans to disrupt Apple from the outside add fuel to investor anxiety. There’s speculation that Altman and Ive are aiming to build an AI-first device that renders traditional smartphones—like the iPhone—less relevant.

Meanwhile, some voices inside Apple have already acknowledged that the clock is ticking. Apple’s senior vice president of Services, Eddy Cue, told a court earlier this year that a world without iPhones in 10 years “may not be as crazy as it sounds.”

Melissa Otto, an analyst with Visible Alpha Research, notes that Apple’s AI additions to the iPhone last year failed to trigger the anticipated “supercycle” of upgrades. Many users only replaced older devices due to hardware issues, not new software features. According to data from Consumer Intelligence Research Partners, the majority of iPhone users in 2024 made purchases due to broken screens or battery problems, not because of excitement over AI.

All eyes now turn to Apple’s Q3 earnings call on Thursday, where the company is expected to post over $40 billion in iPhone revenue and about $26.8 billion in Services revenue. But analysts say financial performance won’t be enough. Investors are looking for a forward-looking AI narrative, a credible path that shows Apple can lead, not just follow.

Dan Ives and others believe Perplexity is the most obvious bet. Whether Tim Cook agrees—or continues to play the long game—could determine if Apple stays a leader or becomes a follower in the next era of computing.