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Investors feeling let down by Apple (AAPL) and its stalled AI initiatives might want to sit back and wait things out.
“You don’t really miss the boat on AI because it’s going to be here for a long time, and Apple has the best distribution,” Evan Cheng, co-founder and CEO of blockchain player Mysten Labs, told Yahoo Finance executive editor Brian Sozzi on the Opening Bid podcast (see the video above or listen below). “That’s their strength and they understand it.”
Cheng is a longtime tech insider with stints at Meta (META) and a decade at Apple. Mysten Labs, his current company, provides decentralized infrastructures for the web.
“If you look at what Apple is doing, they’re not in the business of developing their own foundational model, they’re using the company’s model,” Cheng said. “What they’re trying to do is integrate that into every service they provide to the consumer.”
“This is why OpenAI had to deal with them,” he continued. “Another would love to have a deal with Apple that has that special advantage than perhaps few, if any, others have.”
Apple’s entry into the AI era has reportedly been plagued with engineering setbacks, missed deadlines, and rising pressure from rivals.
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Its closest competitors have spent big on their artificial intelligence initiatives, and gained fans on Wall Street as a result.
Recently, Amazon (AMZN) invested $4 billion in AI model builder Anthropic, completing an $8 billion pledge. Alphabet (GOOGL) announced a $75 billion investment for AI infrastructure and to develop it. And Meta has announced plans to invest $65 billion toward AI in 2025.
Apple Intelligence intends to compete in the AI landscape and is available on devices with iOS 18.4 or higher. But it’s a partial rollout, and Apple has plans to make it widely available later. Some of Apple’s adoring fans, now unimpressed, have turned to hate on Reddit, calling it a “steaming pile of mess.”
“You can see how hard it is to integrate new technology into a legacy kind of product, even though Apple puts out new hardware and software every year,” Cheng explained. “A lot of architecture, the underlying operating system, the user interface, everything, how it works, is not really quite ready for it.”
Analysts have largely given Apple the benefit of the doubt on AI.
“We see the opportunity for investors to look for earnings growth through Services growth and margin expansion to be the primary driver of share price returns while awaiting further visibility in relation to AI-led volume uplift heading into the iPhone 17 cycle, implying limited downside risks over the medium term,” JPMorgan analyst Samik Chatterjee wrote in a note.
