Is Apple Losing the AI Race? Why $200 Might Be a Make-or-Break Moment

As artificial intelligence (AI) continues to reshape the technology landscape, $Apple(AAPL)$ finds itself at a critical juncture. Investors and analysts are questioning whether Apple is lagging in the AI race, particularly among the Magnificent Seven—Apple, Microsoft, Alphabet (Google), Amazon, Nvidia, Meta, and Tesla. With Apple’s stock price hovering around $198.78 as of June 11, 2025, down from a 52-week high of $259.47, concerns about its AI progress and market performance are mounting. Reports of a delayed Siri overhaul and earlier speculation about unconfirmed partnerships with companies like Google, Baidu, and Alibaba have fuelled debates about Apple’s competitiveness. This article explores Apple’s AI strategy, its position relative to its peers, and whether its stock is a buy around the $200 mark.

Apple’s AI Developments in 2025

At the Worldwide Developers Conference (WWDC) 2025, Apple unveiled "Apple Intelligence," a suite of AI features designed to enhance its ecosystem of devices, including iPhone, iPad, Mac, Apple Watch, and Apple Vision Pro. Key features include:

Live Translation: Real-time language translation across devices.
Visual Intelligence: Enhanced image and text processing, with integration into apps like Google and Etsy for search capabilities.
Genmoji and Image Playground: Creative tools for generating custom emojis and images.
Workout Buddy: AI-driven personalized workout insights on Apple Watch.

These features are powered by Apple’s on-device large language models, accessible to developers via the Foundation Models framework, which supports offline AI processing at no cost. Apple’s emphasis on privacy, with on-device processing and Private Cloud Compute, sets it apart in an era where data security is paramount. The company also introduced Generative AI Human Interface Guidelines to ensure responsible AI development.

However, a significant setback is the delay in the overhaul of Siri, Apple’s voice assistant. Initially expected at WWDC 2025, the more personalized Siri was postponed due to quality issues, with Apple’s SVP Craig Federighi stating that additional time is needed to meet quality standards. This delay has sparked concerns about Apple’s ability to compete in the consumer AI space.

Strategic AI Partnerships

Contrary to earlier speculation, Apple has secured significant AI partnerships to bolster its offerings. Globally, Apple has integrated ChatGPT from OpenAI into its ecosystem, enhancing features like Image Playground and Writing Tools. Plans to collaborate with Google’s Gemini model further demonstrate Apple’s commitment to leveraging external AI expertise.

In China, a critical market accounting for nearly a fifth of Apple’s sales, the company has partnered with both Baidu and Alibaba. Baidu is enhancing AI-based search features and improving the Chinese-language Siri experience, while Alibaba’s Qwen model powers AI functionalities for iPhones in China. These partnerships are vital for Apple to compete with domestic rivals like Huawei and Xiaomi, especially after an 11% iPhone sales decline in China attributed to the absence of Apple Intelligence.

Apple vs. the Magnificent Seven

To determine whether Apple is "dead last" in the AI race, it’s essential to compare its efforts with those of the other Magnificent Seven companies:

Microsoft and Google appear to be leading in terms of aggressive AI rollouts, with Microsoft focusing on productivity and Google on search and multimodal AI. Tesla’s robotaxi initiative, set to launch in Austin by June 2025, positions it uniquely in the AI-driven mobility sector. Amazon, Nvidia, and Meta are also advancing rapidly in their respective domains. Apple, while not leading in every aspect, leverages its ecosystem and privacy focus to differentiate itself. The Siri delay is a notable setback, but Apple’s broader AI strategy suggests it is not "dead last."

Stock Market Outlook: Is $200 a Good Entry Point?

Apple’s stock price, as of June 11, 2025, stands at approximately $198.78, slightly lower than the $200 mark referenced. The stock has seen volatility, with a 52-week high of $259.47 and a low of $168.99. Analysts project revenue of $415 billion for fiscal 2025, with earnings per share of $7.40, implying a price-to-sales ratio of 8.2, which is relatively high. Long-term forecasts are bullish, with some predicting a price of $300 by 2030.

Bullish Factors

AI Growth Potential: Apple Intelligence and strategic partnerships could drive future revenue, particularly in services and new device categories like Apple Vision Pro.
Strong Ecosystem: Apple’s services segment (App Store, Apple Music, iCloud) provides stable revenue, complementing hardware sales.
China Market Recovery: Partnerships with Baidu and Alibaba could help reverse the recent 11% iPhone sales decline in China.

Bearish Factors

Competitive Pressure: Rivals like Microsoft and Google are advancing faster in certain AI areas, potentially impacting Apple’s market share.
Siri Delay: The postponement of Siri’s overhaul could dampen investor confidence in Apple’s AI capabilities.
Valuation Concerns: A high price-to-sales ratio suggests the stock may not be undervalued, increasing risk if growth expectations are not met.

Buying Apple stock around $200 could be appealing for long-term investors who believe in the company’s ability to execute its AI strategy and maintain its ecosystem dominance. However, short-term volatility and competitive pressures warrant caution.

Conclusion

Apple is not too late to the AI party, nor is it "dead last" among the Magnificent Seven. Its Apple Intelligence initiative, coupled with strategic partnerships with OpenAI, Google, Baidu, and Alibaba, positions it as a strong contender in the AI space. The delay in Siri’s overhaul is a challenge, but Apple’s focus on privacy, integration, and quality aligns with its brand ethos. For investors, purchasing Apple stock around $200 could be a strategic move, provided they are prepared for potential volatility and conduct thorough due diligence. Apple’s long-term prospects remain robust, driven by its ecosystem, innovation, and global market presence.

As always, Do Your Own Due Diligence and ensure risk management > prediction. Trade smart, stay adaptable, and don’t let emotions chase candles.

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