Why Gemini AI Powering Apple Siri is Bad News
Apple (AAPL) commanded a $3.38 trillion market capitalization and a price-to-earnings ratio of 34.6 times as of the end of last week. The iPhone supplier is the only member of the Magnificent Seven without an in-house artificial intelligence offering.
AI is growing exponentially. Microsoft (MSFT) embraced it first, while Amazon (AMZN), Meta Platforms (META), and Alphabet (GOOG) are investing heavily in it.
A news report that Apple was in early discussions to adapt Google’s AI model Gemini for Siri is unsettling. This could be bad news that indicates how far behind Apple is in this space. The firm announced “Apple Intelligence during WWDC 2024. This spurred device sales. Fortunately, consumers did not complain about buying an AI-ready device.
If Apple sets Gemini to power Siri, it suggests that investors should shift their allocation away from AAPL stock and toward GOOG stock. GOOGL stock traded at a sub-22 times P/E. This is despite the stock rallying by 46.6% from its 52-week low set in April.
Unclear Strategy
Apple experimented with high-end hardware that failed to catch on with the mainstream. It priced the Vision Pro, a virtual reality headset, too high. Its unaffordability led to too few developers offering apps to the VR. Consumers opted for the lower-priced Meta headset.
Your Takeaway
Google Gemini is embedding its AI in more ecosystems. This is a win for Gemini. It widens its lead over Perplexity, Anthropic, and Grok. All it has to do is catch up to ChatGPT.
