Warren Buffetdespite avoiding the technology sector for a long time, became Apple (NASDAQ:AAPL) the largest position in the conglomerate he leads, Berkshire Hathaway. No, the Oracle of Omaha did not invest in the iPhone maker due to the hysteria surrounding the artificial intelligence (AI). Buffett has owned Apple since 2016, long before the AI narrative began to form.
But over the past year, many of the company’s great technology colleagues Appleas Microsoft It is Alphabet, have made remarkable progress in the field of AI. While the developer of Windows and the internet search giant made several public announcements about its AI ambitions, Apple remained quiet.
Playing it safe is pretty common for Apple – but this time, it felt a little different. With some skepticism emerging that Apple may have missed the AI boat, recent details about the company’s plans have emerged from a Bloomberg report.
Below, we’ll explore how Apple might be pursuing AI and evaluating what it could mean for an investment in the stock.
Warren Buffet knows: slow and steady wins the race
Microsoft kicked off the AI race with a multibillion-dollar investment in OpenAIthe startup behind ChatGPT. Since the investment, the Microsoft quickly integrated the ChatGPT on your Windows operating system – specifically, in applications related to Microsoft Office and the cloud platform Azure from the company.
Alphabet It is Amazon quickly followed Microsoft’s lead, with each company making splashy investments in a Microsoft competitor. OpenAI called Anthropic. This wasn’t entirely surprising given that Alphabet and Amazon compete in cloud computing with Microsoft.
But Applewhich has been left out of the cloud revolution, has remained suspiciously quiet during the AI investment frenzy.
Is Apple Moving Too Slow?
Although Apple has not revealed its AI vision publicly, Wall Street analyst Dan Ives, of Wedbush Securities, theorized that the company could leverage AI capabilities in its App Store. Earlier this month, investors at least got a small preview of how Apple might be advancing AI. The company acquired a Canadian startup called DarwinAIwhich develops technology used to identify defects in hardware devices during manufacturing.
Based on Ives’ theory that Apple can rely on AI capabilities for future growth in the App Store, it makes sense for the company to beef up its quality assurance capabilities across its lineup of hardware devices—which have experienced diminished growth. during the last year. Following the acquisition of Darwin AI, a report published by Bloomberg suggested that Apple is in talks with both Alphabet as with the OpenAI to potentially run your generative AI models on iPhone.
Keep an eye out for more details
A Apple working with the Alphabet Or the OpenAI It wasn’t something many people expected. The company is perhaps most famous for its relentless commitment to product innovation. For this reason, it adopted a closed system, developing technology internally and rarely outsourcing. This is why there is still incredulity regarding a possible agreement with the Alphabet Or the OpenAI.
We can say that this is a do or die scenario for Apple. All of the company’s major technology competitors have made advances in the area of AI. This has left Apple in a disadvantageous game of catch-up – all while growth stagnates.
Working with other AI companies could just be wishful thinking. So this is a partnership that could be a way for Apple to stay in the conversation while the company figures out its real strategy.
That’s why we can see an investment in Apple now as potentially a generational move. It’s very difficult to bet against a company that has such a prolific history when it comes to marrying software with consumer electronics. If Apple is using a strategic relationship with other AI developers as the catalyst for a more significant breakthrough in the future, it could be the first chapter in a much-needed comeback story.
Warren Buffet Likes Apple Stock
However, with shares trading at 26 times forward earnings, the company’s stock Apple is more expensive than both Alphabet as the S&P 500. So it’s not quite understandable why an investor would pay a premium over the broader market and other established players in AI – especially for a company that isn’t growing and doesn’t appear to have a concrete plan.
Given Apple’s long-term success, however, let’s give it the benefit of the doubt – for now. While it’s best to be cautious about buying the stock at its current valuation, there is curiosity to learn more about any potential relationships with competing platforms. In fact, as we know that Warren Buffet knows “a little” about the business, a prudent strategy is to pay attention to any additional details about Apple’s AI roadmap and assess the stock’s volatility after any news.
If your conviction increases with any developments in the Apple related to AI, it may be worth buying shares and holding for the long term.
Source: Atrevida
Earl Johnson is a music writer at Gossipify, known for his in-depth analysis and unique perspective on the industry. A graduate of USC with a degree in Music, he brings years of experience and passion to his writing. He covers the latest releases and trends, always on the lookout for the next big thing in music.
