Apple Investors Grow Impatient on Artificial Intelligence

Apple has had the weakest stock performance in the past year among its big tech rivals.
Apple has had the weakest stock performance in the past year among its big tech rivals.


The iPhone maker is expected to unveil AI tools at its June developer conference after it has lagged behind tech peers with a clearer AI strategy.

Over and over again, Apple Chief Executive Tim Cook has been asked the same question: What is Apple doing about generative artificial intelligence? His answer: Stay tuned.

Investors are getting impatient.“Apple really hasn’t made a big splash in the AI space yet," said Brian Mulberry, client portfolio manager at Zacks Investment Management, an Apple shareholder. “AI is what most investors are really excited about. Almost all momentum in the market in general is being fueled by AI."

That sentiment is why Apple’s decision to shift some employees into AI and cancel its electric-car project—one of the most widely anticipated potential tech products in a decade—was greeted with almost universal investor enthusiasm Tuesday. Company shares rose by about 1%, an unusual sign after one of the world’s most innovative companies decides to give up on an ambitious gambit.

On Wednesday, Cook once again sought to address the investor concerns, as he has on every quarterly earnings call for the past year.

“We’ve been investing and innovating in AI for many, many years," he said at the annual shareholder meeting, pointing out several areas where Apple already uses the technology. He added: “We also see incredible breakthrough potential for generative AI, which is why we’re currently investing significantly in this area." Apple is expected to release generative-AI features in its software at its annual developer conference typically held in June.

Apple, for years one of the most beloved stocks held by famed investors such as Warren Buffett, has had the weakest stock performance in the past year among its big tech rivals. A slowdown in the company’s core iPhone business has played a major role, but a lack of new artificial-intelligence products has also been a factor.

“AI is the topic du jour," said David Wagner, a portfolio manager at Apple shareholder Aptus Capital Advisors. “The market nowadays tends to be driven by narrative more than anything else. Everybody is clamoring for Apple to have a story."

Microsoft has overtaken Apple as the most valuable company in the world earlier this year, a lead it looks poised to maintain for some time. Among large tech companies, Microsoft has found itself in the lead position in generative artificial intelligence as the largest investor in OpenAI, the startup behind ChatGPT.

While Apple’s stock has increased at a clip of more than 20% in the last 12 months, Microsoft is up more than 60%. Nvidia, the leading chip provider in artificial intelligence, has more than tripled in value.

Siri’s launch in 2011 made Apple an early entrant in consumer-focused AI products, but the company has since fallen behind in recent years. Siri struggled to keep up with rival voice assistants from Amazon and Google in accuracy and usefulness. Apple’s strict stance on data privacy hampered development on more advanced models.

To help boost Apple’s artificial-intelligence work, it hired John Giannandrea from Google in 2018 to lead overall efforts at the company. Giannandrea, a senior vice president at Apple, reports directly to Cook, a sign of the increased significance of the technology inside Apple. But since his arrival, Apple still hasn’t made the kind of splashy announcements its rivals have touted.

Android competitors have begun introducing new artificial-intelligence features into phones. Rival smartphone-maker Samsung Electronics has recently introduced its latest high-end Galaxy phones that takes advantage of some of the latest advancements in generative AI, with features such as translating languages in real time on phone calls, summarizing notes and editing photos.

Even if Apple does succeed in introducing new AI features that make the company more competitive in this field, it’s unclear if it will do much to increase sales for the company, said analysts and investors. New features will be necessary to keep up with Android rivals, but are unlikely to kick-start another wave of device sales.

“I still struggle with how early we are in AI," said Ben Bajarin, principal analyst at consumer-technology research firm Creative Strategies. “If you look at all the examples that people show for consumer AI, it’s fine but none of this feels revolutionary yet."

Cook’s signature new product is the Vision Pro, but its viability as a meaningful revenue generator is still many years away, said analysts. Artificial intelligence already plays a vital part in the headset with the mapping of three-dimensional spaces.

Write to Aaron Tilley at

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