Apple Stock Drops 16% as Investors Demand AI Overhaul

Apple Inc. is facing mounting pressure to revamp its operational strategy to bolster its underperforming artificial intelligence (AI) business. The tech giant has seen its stock price decline by 16% this year, leading to a significant loss in market capitalization exceeding 6400 billion dollars. Investors are increasingly urging Apple to deviate from its traditional approach and pursue major acquisitions while aggressively recruiting top talent in the AI field.

Historically, Apple has been cautious about large-scale acquisitions, with its most recent significant purchase being the 2014 acquisition of Beats. However, analysts believe that acquiring or making a substantial investment in a mature AI provider could positively shift investor sentiment. Apple's stock performance has lagged behind competitors like Meta Platforms Inc., which have seen their stock prices surge due to substantial investments in AI.

Apple's strategy has long been focused on in-house product development rather than acquisitions. The company's largest acquisition to date was the 3 billion dollar purchase of Beats, an earphone manufacturer, over a decade ago. Recent indications suggest that Apple may be reconsidering this approach. Last month, reports surfaced that Apple executives had internal discussions about acquiring the AI startup Perplexity AI. This potential acquisition would bring in valuable talent and support Apple's efforts to develop an AI-based search engine. Perplexity AI recently completed a funding round, valuing the company at 140 billion dollars.

Analysts have voiced strong support for this potential acquisition. One analyst described acquiring Perplexity AI as a no-brainer decision, suggesting that even if Apple were to pay 300 billion dollars, it would be a small investment compared to the commercial opportunities it could unlock in the AI sector. Despite these calls for strategic changes, Apple has not responded to requests for comment. The company's stock fell by 1.3% on Monday, reflecting ongoing investor concerns about its AI capabilities and strategic direction.