Apple is set to announce its Q3 earnings tomorrow, which means many analysts are releasing research notes today about the company. That includes Wedbush, who believes that Apple’s internal AI development “is a failure“, and that Tim Cook should open his pocketbook to acquire Perplexity.
AI has been the elephant in the room for Apple for the last year or so. And many were expecting that Apple Intelligence would be a big driver for sales of the iPhone 16 series last year. But that didn’t happen. Mostly because Apple failed to deliver those Apple Intelligence features.
Wedbush is calling for Apple to bite the bullet and make the “no-brainer deal” to buy Perplexity to boost its AI features. Keep in mind, Apple has the cash. Right now, a deal to buy Perplexity would likely cost around $40 billion, which Apple could pay in cash, without even having to offer up shares for the deal. Apple currently has over $48 billion in cash on hand, as of its last quarterly earnings in March.
AI is an important aspect of smartphones these days. For the most part, every phone has the same hardware and specs, and what differentiates them is the AI features. Wedbush believes that if Apple can get on track with AI and get the right monetization strategy for AI, it could be worth up to $75 per share.
Analysts expect Apple to release strong numbers tomorrow
Despite Apple’s fiscal third quarter usually being one of the slower ones, Apple should still release pretty strong numbers tomorrow. Analysts believe this would be driven by some Chinese revenue improvements.
Other analysts have also said that there’s been stable demand for the iPhone in the quarter, and it has also done better in China. Services are also expected to have pretty strong growth.
Of course, the next quarter is the big one for Apple. Their fiscal Q4 typically includes the launch of the new iPhones (including iPhone 17), even if they are only available for a few weeks within the quarter. In the first weekend of the iPhone 16 being available, Apple reportedly sold over 37 million iPhones. That’s more than most Android OEMs will sell in an entire year.
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