Investors are urging Apple to reconsider its strategy following a loss of over $630 billion in market capitalization this year. The discussions are focused on potential mergers and acquisitions.
Stock Drop and Tariff Impact
In April, the introduction of reciprocal tariffs adversely affected Apple because of its reliance on Chinese operations. The company’s stock dropped by 19% in just three days. Even after the tariffs were paused, the firm faced slow progress due to regulatory hurdles and a lack of significant AI innovations.
Possible Acquisition of Perplexity AI
Reports suggest that Apple is exploring a potential bid for the AI startup Perplexity AI, which could aid in its AI development. Citigroup analyst Atif Malik indicated such an investment would be highly beneficial. The last major acquisition Apple made was a decade ago with the $3 billion purchase of Beats.
Criticism and Competition in AI
Kevin Cook, a senior stock strategist at Zacks Investment Research, has urged Apple to focus on hiring AI talent like Meta does. He commented that Apple’s challenges in AI may be overstated. However, the company recently lost a key AI executive who moved to Meta, threatening its generative AI ambitions.
In light of the declining market capitalization and challenges in AI, Apple faces an urgent need to revise its strategy, including potential mergers and acquisitions to improve its market stance.
