Apple’s annual Worldwide Builders Convention (WWDC) in June left a few of Wall Avenue’s most distinguished voices feeling oddly nostalgic—and never in a great way. In response to Dan Ives, a high tech analyst at Wedbush Securities recognized for his prescient, albeit oft-times bullish, calls on Silicon Valley’s giants, was bearish about Apple. The ambiance at this yr’s WWDC, he wrote in a July 30 analysis be aware, “felt like an episode out of ‘Again to the Future’”—particularly when it got here to Apple’s therapy of synthetic intelligence.
Whereas fellow tech titans are racing to place AI entrance and heart, Apple’s WWDC presentation was notable for its close to silence on the topic. “Barely no point out of AI,” Ives remarked in his newest report, calling it “the elephant within the room.” He famous this was a stark distinction to the fever pitch seen at rival developer occasions. Analysts, traders, and builders tuned in with expectations of a grand reveal that will make clear Apple’s ambitions for the “AI Revolution.” As a substitute, they watched as the corporate leaned on conventional strengths—{hardware} updates and a powerful companies story—leaving the way forward for Siri and Apple’s broader AI roadmap conspicuously imprecise.
This omission has develop into a rising concern for analysts like Ives, who consider Apple is at a crossroads. “It’s turning into crystal clear that any innovation round AI at Apple isn’t coming from contained in the partitions of Apple Park,” he wrote, referencing the corporate’s famed Cupertino headquarters. Whereas Apple has traditionally prided itself on constructing transformative know-how in-house, Ives argues these days could also be over.
Time for an acquisition?
“The time has come” for a giant acquisition, he wrote, singling out Perplexity as a “no brainer” acquisition goal—even when it prices upwards of $40 billion. In response to Ives, such a transfer might immediately supercharge Apple’s lagging AI platform and assist reposition Siri because the “subsequent AI gateway for customers.”
To this point, Apple’s greatest acquisition stays Beats, a $3 billion deal in 2014—an order of magnitude smaller than the sorts of offers reworking the AI sector immediately. Apple’s historically cautious strategy to M&A, Ives suggests, could also be holding it again at a time when pace is all the things. “AI know-how on the enterprise and shopper panorama is going on at such a speedy tempo Apple won’t be able to meet up with an internally constructed resolution,” he warned. The stakes, Ives estimates, are excessive: A profitable AI monetization technique might add as a lot as $75 per share to Apple’s valuation. “We consider [CEO Tim] Prepare dinner wants to tear the band-aid off and eventually do an M&A deal,” he wrote.
The muted AI narrative at WWDC comes throughout a broader interval of transition for Apple. Whereas demand for iPhones—a bellwether for the corporate—stays globally sturdy, with specific enchancment in China after a yr of powerful competitors, the corporate faces mounting headwinds. Commerce tensions, evolving provide chain dangers, and rising stress from lower-priced rivals in Asia have burdened Apple’s core markets.
For now, analysts are retaining religion with Apple’s near-term efficiency. Wedbush maintains its “Outperform” score, with a 12-month worth goal of $270 per share, citing anticipated development pushed by the upcoming iPhone 17 and continued power in companies. The inventory was buying and selling at $211.27 on the time of writing. However Ives is steadfast: the following chapter—centered on AI—will outline Apple’s future.
Prepare dinner’s extraordinary document—and mounting criticism
To be clear, Prepare dinner has had a legendary run after succeeding Steve Jobs in 2011. Over the following 14 years, Prepare dinner has led Apple by means of a interval of extraordinary shareholder worth creation—reworking a $300 billion firm right into a $3.2 trillion titan. Beneath his stewardship, Apple refined its operational effectivity, reinvigorated its companies division, and delivered large income by means of established hits just like the iPhone, AirPods, and Apple Watch. However as Fortune‘s Geoff Colvin reported, “immediately his weaknesses are on show within the AI period.”
A refrain of analysts has joined Ives in arguing that Prepare dinner’s operational excellence and supply-chain mastery will not be sufficient to win the long run, because the AI period upends the tech trade’s priorities. The primary half of 2025, moreover, has been bruising. The corporate’s inventory is down about 16%, whereas rivals like Microsoft and Alphabet have soared on aggressive bets in generative AI. Apple’s “Apple Intelligence” initiative, which was alleged to place Siri and different options on the forefront of shopper AI, has did not seize investor or developer enthusiasm. In the meantime, key AI executives have left: Apple’s high AI government Ruoming Pang just lately defected to Meta, simply weeks after one other high Apple AI scientist, Tom Gunter, resigned. Concurrently, Chief Working Officer Jeff Williams—a long-touted Prepare dinner successor—is about to retire, forcing a broader administration overhaul.
These departures have intensified debate about Apple’s innovation pipeline. Critics argue that underneath Prepare dinner, Apple has not delivered any genuinely transformative new product for the reason that Jobs period, with most up-to-date hits—like AirPods or the Apple Watch—refining relatively than redefining product classes. The danger, analysts warn, is existential: If sensible gadgets shift into new AI-centric paradigms and Apple fails to reply forcefully, the corporate’s platform dangers obsolescence.
Analysis agency LightShed Companions rocked traders and the tech press in July by calling for a regime change. Analysts Walter Piecyk and Joe Galone insisted Apple wants a product-focused CEO, not one centered on logistics. They warned Apple’s lack of compelling innovation in AI and the comparatively stagnant development of Siri might irreversibly erode its aggressive edge as Google, Microsoft, and OpenAI press ahead.
Prepare dinner’s defenders argue Apple has a singular place: its platform lock-in provides it time to execute a measured AI response. And traditionally the corporate has hardly ever been first-mover—its success derives from perfecting current applied sciences, not inventing them. Nonetheless, with AI’s foundational impression in comparison with the web or electrical energy, permitting the competitors to set the tempo might be harmful.
Ives remains to be backing Prepare dinner, with reservations. “Persistence is carrying skinny amongst traders and importantly builders,” he warned. The approaching months, significantly as Apple’s product cycle heats up in September and past, might show pivotal—not only for the corporate’s steadiness sheet. Ives mentioned Wedbush believes Prepare dinner will likely be Apple CEO for an additional 5 years, at the very least, however there are mounting challenges, from the “tariff iPhone quagmire,” with Apple’s manufacturing operations in China straight uncovered to commerce uncertainty, to President Donald Trump’s displeasure with India as an alternate provide chain resolution, to “lacking the AI foundational technique.” He concluded, “this chapter will outline Prepare dinner’s legacy.”
“It’s time for Prepare dinner and Cupertino to face the brand new actuality of this rapidly morphing AI-driven tech panorama,” Ives wrote. “As a result of if they don’t change, it is going to be a historic strategic black eye for Apple in our view.”
For this story, Fortune used generative AI to assist with an preliminary draft. An editor verified the accuracy of the knowledge earlier than publishing.
