Apple's Content Production Business Gains Momentum

Jim Cramer believes Apple Inc. (AAPL) has "got game" due to its content production business. He also comments on Apple's AI strategy, suggesting it needs to acquire Perplexity to become the number one AI chat company immediately. Cramer emphasizes the importance of Apple spending its $500 billion investment commitment in the US to curry favor with the Trump administration.

Apple Inc. (AAPL) has been under scrutiny for its AI efforts, with the stock experiencing a 16% decline year-to-date (YTD) amid tariff pressure and AI-related concerns. Jim Cramer, a prominent financial analyst, believes that Apple has the potential to turn things around, particularly in its AI strategy. He suggests that Apple should acquire Perplexity AI to become the leading AI chat company and also emphasizes the importance of spending the $500 billion investment commitment in the US to gain favor with the Trump administration.

Cramer's comments come at a time when Apple's AI initiatives have lagged behind competitors like OpenAI, Google, and Meta. The company's recent AI announcements have been met with skepticism from analysts, who have labeled them as "snoozers." LightShed Partners has even called for CEO Tim Cook to step aside, citing the need for a more product-focused leader to address Apple's AI shortcomings. However, others argue that Cook's past success, including a nearly 1500% stock price increase, makes calls for his departure premature.

Apple's upcoming earnings report is expected to provide insight into the company's turnaround prospects. The company has announced a $500 billion U.S. investment plan over four years, including a new server manufacturing facility in Houston and expanded data centers. These moves aim to bolster its Private Cloud Compute infrastructure, a critical backbone for Apple Intelligence. Additionally, Apple has doubled its Advanced Manufacturing Fund to $10 billion, signaling a commitment to domestic silicon production and AI-driven infrastructure.

Cramer's advice to Apple is to spend its $500 billion investment in the US to curry favor with the Trump administration. He believes that such a move could help Apple achieve the same clout with the Trump administration as NVIDIA CEO Jensen Huang has. Cramer also suggests that Apple should acquire Perplexity AI, a Gen AI startup valued at $14 billion, to become the leading AI chat company immediately.

For investors, Apple's AI trajectory hinges on three factors: 1. Execution of AI Partnerships: Can Apple integrate external AI expertise into its ecosystem without compromising its privacy-first ethos? 2. Leadership Realignment: Will Tim Cook's continued tenure focus on AI innovation, or is a product-centric leader needed to drive urgency? 3. Regulatory and Geopolitical Risks: Tariff threats and antitrust lawsuits could strain resources, diverting focus from AI R&D.

Apple's financial flexibility—$133 billion in cash and a $3.14 trillion market cap—provides room for bold moves. However, the company's reluctance to acquire AI talent at scale risks leaving it in the shadows of competitors.

References:
[1] https://www.ainvest.com/news/apple-stock-16-ytd-tim-cook-called-step-ai-worries-2507/
[2] https://sg.finance.yahoo.com/news/apple-inc-aapl-spend-money-102448499.html
[3] https://www.ainvest.com/news/apple-aapl-break-moment-ai-transformation-2507/