Why Apple Needs to ‘Rip the Band-Aid Off' and Make This Move, According to Wedbush
Key Takeaways
- Apple should make a move to acquire Perplexity and its AI search engine, Wedbush analyst Dan Ives said in a note Wednesday.
- The addition of Perplexity could help Apple advance its highly anticipated AI-enhanced version of Siri, which has been delayed until 2026.
- Apple should be willing to pay more than double Perplexity’s current value of about $14 billion, Ives argued, given the huge monetization potential of AI.
Apple (AAPL) should consider making a major acquisition if it wants to catch up to its peers in the artificial intelligence race, according to one Wall Street analyst.
Wedbush Securities’ Dan Ives, a longtime Apple bull, wrote Wednesday that while Alphabet’s (GOOGL) Google, OpenAI, and others have pulled ahead on AI, “Apple is at a highway rest stop on a bench.”
Ives’ solution for the iPhone maker is to “rip the band-aid off” and acquire Perplexity, along with its AI-driven search engine. Such a deal “could redefine Apple’s AI strategy and would fit in very well with Siri,” Ives said. “Perplexity’s AI algorithms and technology are some of the most impressive in the tech AI world.”
Perplexity, which is private, has a valuation of about $14 billion based on its current investing round, Ives noted. That said, even if Apple had to pay $30 billion to get the deal done, “it’s a drop in the bucket relative to the monetization opportunity Apple can achieve on AI,” he added.
The delayed rollout of an AI-enhanced Siri has been a disappointment for Apple investors and analysts this year. Apple previously expected to release a more powerful version of its voice assistant Siri as early as this spring. However, the company suggested at its Worldwide Developers Conference last month that more information on that is unlikely to come before 2026.
Apple has reportedly discussed with ChatGPT maker OpenAI and Claude developer Anthropic the possibility of relying on their AI models instead of in-house technology. Siri can already be used to access ChatGPT with some iPhone models. The company has also considered adding Perplexity’s search engine, said Eddy Cue, Apple’s senior vice president of services, in May.
Separately, Perplexity launched an AI-powered web browser on Wednesday known as Comet, in direct competition with Google Chrome and other web browsers, according to reports. The browser is currently available to subscribers of Perplexity Max, which costs $200 per month.
Apple Loses a Top AI Executive
The urgency around Apple’s AI progress comes after the company reportedly had its top executive in charge of artificial models poached this week by rival Meta Platforms (META). Ruoming Pang, the head of Apple’s foundation models team, was offered tens of millions of dollars a year to join Meta CEO Mark Zuckerberg’s growing “Superintelligence” team, the report said. Zuckerberg has reportedly expressed frustration that Meta has not made enough progress with its AI models.
Shares of Apple were little changed Wednesday at about $211. The stock is down roughly 16% for 2025, making it the second-worst performer among the Magnificent Seven after Tesla (TSLA).