Is This What Apple Stock Needs to Turn Things Around?
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Apple (AAPL -1. 76%) is one of the most valuable companies in the world, with a market cap of $3. 17 trillion. But the stock is down 15% since the beginning...
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July 8, 2025
04:15 AM
The Motley Fool
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Apple (AAPL -1. 76%) is one of the most valuable companies in the world, with a market cap of $3. 17 trillion
But the stock is down 15% since the beginning of the year (as of July 7)
Investors are concerned the stock's growth potential, as the delayed rollout of artificial intelligence (AI) features for its iPhones could leave the scrambling to keep up with its rivals
But recently, Apple has been linked to a possible deal to acquire a major AI company
Could this be just what the company needs to turn things around and spark a rally in its price
Image source: Getty Images
Apple reportedly looking at acquiring Perplexity AI According to a recent report from Bloomberg, Apple is contemplating the purchase of Perplexity AI
The company's chatbot is one of many alternatives to OpenAI's ChatGPT
Perplexity AI is focused on a chatbot designed as an answer engine, prioritizing real-time web and accurate, cited answers
There are an estimated 15 million active monthly users on Perplexity
While that puts it nowhere near ChatGPT, which averages 400 million users each week, Perplexity has become one of the minent chatbots out there, and it has been growing in ity
The move can potentially make a lot of sense for both Apple and Perplexity, with the AI company being worth around $14 billion, based on a recent funding round
For Apple, while that would be a big acquisition, it wouldn't be hard to fund the deal; as of the end of March, the giant had more than $28 billion in cash and cash equivalents on its books
For Perplexity, having a company with deep pockets to help fund its growth could help it to better compete against ChatGPT and other chatbots
Why a big AI acquisition may not necessarily solve Apple's blems An acquisition of Perplexity AI or another similar AI company would instantly enhance Apple's capabilities
Apple would be less dependent on other chatbots if it had one of its own
And it would acquire the AI talent it needs to position itself for greater AI-related growth opportunities in the future
But the big blem may come from higher up, with Apple's management taking a conservative apach to AI and focusing on security and privacy over speed
Perplexity has run into blems with copyright infringement, which could lead to costly legal bills and may lead to the need for safeguards
Plus, the core issue at hand is incorporating advanced AI features into Apple's iPhones, not necessarily the company having its own chatbot
Apple has delayed some AI features for its iPhones until next year
And without next-gen features, customers may see little reason to upgrade their iPhones
IPhone sales over the past six months have essentially been flat year over year at around $116 billion
Is Apple a good buy right now
Apple hasn't announced a deal to acquire Perplexity, and there is no reason to believe that an acquisition is imminent
But I do believe that Apple, with its massive stockpile of cash, can dig itself out of its current hole
One big acquisition could transform its growth spects, though it may not be a quick or easy fix
And with the stock trading at 31 times its trailing earnings, I don't think it's cheap enough to buy given its struggles and limited growth of late
I would want more of a discount before buying the stock to ensure a bigger margin of safety
David Jagielski has no position in any of the stocks mentioned
The Motley Fool has positions in and recommends Apple
The Motley Fool has a disclosure policy.
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