Apple (AAPL)'s car is dead. And with no big, flashy products to look forward to, Wall Street is pinning its hopes for the tech giants' immediate future on generative AI.
In his first report on Apple's decision to exit its automotive business, Bloomberg's Mark Garman notes that many of the 2,000 employees previously assigned to the project will be transferred to the company's artificial intelligence division. He said he would work on segmenting Apple's generative AI. Snuff.
The news briefly boosted Apple stock on Tuesday, with the stock rising to an intraday high of $183.92 before closing at $182.63. Apple stock was trading at $180.33 at noon Thursday.
Apple has a market capitalization of $2.77 trillion, making it the second richest company in the world after Microsoft (MSFT). But the iPhone maker is also battling a volatile smartphone market, leaving investors wondering where the company's next growth will come from.
And aside from the completely redesigned iPhone, generative AI appears to be the only new product that could help sales of Goose's devices and services.
But Apple, like MO, has been quiet about its commitment to generative AI. CEO Tim Cook has not provided any insight into what features the company is exploring through the technology or whether they will be brought to market this year.
During Apple's latest earnings call, Cook said the company is excited to show off what it has been working on and will debut that work this year. He later said that generative AI is a huge opportunity for Apple. At the company's annual shareholder meeting on Wednesday, the CEO said Apple is investing heavily in AI and will break new ground in generative AI later this year.
That means we'll likely learn more about Apple's generative AI plans at its next WWDC conference, usually held in June. And the pressure is on to make sure those announcements include some new photo-editing tools and a kitschy feature that lets you change the tone of your text messages to sound like Shakespeare.
“We believe Apple plans to announce a number of new Gen AI software features at WWDC in early June,” Morgan Stanley analyst Eric Woodring said in response to the Bloomberg report. “We believe this is an important event that will accelerate the upgrade cycle,” he wrote in a note after the Bloomberg report. report.
“Apple will incorporate generative AI into the iPhone 16, marking the beginning of a new growth frontier for Cupertino's golden installed base,” Wedbush's Dan Ives said in his note. He said he believed that. Additionally, he said the addition of former automotive engineers and developers could accelerate Apple's AI efforts over the next 12 to 18 months.
The generative AI craze has pushed the stock prices of Apple's rivals higher than ever, including Microsoft, which has overtaken Apple as the most valuable publicly traded company thanks to the ChatGPT developer's investment in OpenAI. Meta (META), Amazon (AMZN), Google (GOOG, GOOGL) and others have similarly jumped on the generative AI bandwagon with their own announcements and product launches.
But diving deep into generative AI is a double-edged sword. Sure, these companies get the buzz and excitement that comes with new AI-powered generative services, but when those services underperform, technology companies are left in the lurch. Look at Google. Gemini AI image generation software produced images of ethnically diverse Nazis, then stopped producing them.
This puts added pressure on Apple to not only go to market in a big way, but also to make what it deploys as bulletproof as possible. We'll find out if the company has the product available when WWDC starts in June.
Daniel Howley I'm the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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