Apple will present its third-quarter 2025 results on July 31. Expectations are good, and analysts anticipate solid results. However, another issue is taking center stage: Apple's approach to artificial intelligence. Pressure is mounting, especially from investors and analysts. Wedbush sees a serious problem in Apple's current AI strategy—and recommends a drastic step.
Apple regularly delivers stable quarterly figures, remains the technological leader in the smartphone market, and consistently earns money from its services. Nevertheless, doubts are growing as to whether the company can keep pace with artificial intelligence. Other Big Tech companies are investing heavily in AI development and selectively purchasing expertise. Apple, on the other hand, has so far relied almost exclusively on internal solutions—according to Wedbush , a strategic mistake that could prove costly in the long run.
Sales stable – China picking up again
According to Wedbush, Apple performed well overall in the past quarter. Particularly positive: In China, a recently weakening market, there are signs of recovery. iPhone demand there was stable, even better than expected according to analysts. Demand for Apple products was also largely constant in other Asian markets. Solid growth is expected, as usual, in the services segment, which includes Apple Music, iCloud, and the App Store. This segment remains one of the most important sources of revenue outside of hardware sales.
iPhone 17 in sight: Pent-up demand as an opportunity
The launch of the new iPhone generation is already scheduled for the fourth quarter. Apple is expected to launch the iPhone 17 in September. Analysts expect this to boost sales. The reason for this is the so-called "aging install base": Around 20 percent of the approximately 1.5 billion active iPhones worldwide have not been replaced in over four years. This group could now be ready for an upgrade. Demand for new devices could be correspondingly strong. The analyst conference following the release of the Q3 figures is likely to focus heavily on the outlook for the iPhone 17. However, statements from CEO Tim Cook on upcoming products are not expected, as Apple traditionally does not give previews of new hardware or services.
AI as a weak point: Apple lags behind
The central problem, from Wedbush's perspective, is Apple's lack of momentum in the field of artificial intelligence. While other tech giants made a big splash with their AI initiatives at this year's WWDC, the topic was almost completely absent at Apple. The delay in updating Siri is considered a key reason why the company's internal AI program, "Apple Intelligence," has stalled. Wedbush describes the situation as a clear backlog. The analysts question whether Apple is capable of building a competitive AI strategy without external help.
Buying Perplexity recommended – even at a high price
Wedbush considers it "crystal clear" that Apple's current AI efforts are not sufficiently functioning internally. The recommendation is clear: Apple should rely on external solutions and acquire Perplexity. Perplexity operates an advanced AI platform and is considered a promising provider in the segment. A purchase of Perplexity is recommended even if the price is as high as $40 billion. According to the analysts, it would be a "no-brainer," a logical and necessary decision. Apple cannot afford a strategic setback. With its current internal structures, the company is not competitive in the AI field.
Potential value creation through successful AI monetization
If Apple successfully monetizes artificial intelligence, analysts see considerable potential. Wedbush expects the company's value to increase by as much as $75 per share if Apple establishes a viable AI strategy. Despite the criticism, Wedbush remains fundamentally optimistic: The price target remains at $270 per share, and the rating remains "Outperform." However, without concrete measures in the area of artificial intelligence, Apple could lose competitiveness – despite solid sales in other areas.
Apple delivers – but AI lacks direction
Apple remains in strong financial shape. The third quarter is expected to deliver positive signals with stable sales and a recovery in China. The iPhone 17 also provides an optimistic outlook for the fourth quarter. However, artificial intelligence remains its biggest weakness. Analysts like Wedbush see the risk of a strategic lag. The proposal to acquire Perplexity is clear—and emphatically worded. Without external help, Apple could fall behind in the AI race. The key question for investors remains whether the company changes its stance—or continues to rely on a purely internal solution that has so far underwhelmed. (Image: Shutterstock / Champhei)
Disclaimer: No recommendation for investments
This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.
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