Top 10 AI News You Shouldn’t Miss

3. Apple Inc (NASDAQ:AAPL)

Number of Hedge Fund Investors: 158

Bonawyn Eison, Chief Investment Officer and Managing Partner, Wynsource Partners, recently said on CNBC that he does not believe AI would be a strong enough driver for Apple Inc. (NASDAQ:AAPL) to take the company to the next level.

“I just don’t understand what the real drivers of the super cycle are, and if AI is the catalyst behind it, I can understand that. They don’t have the same cashback spend as some of the other MAGs, so there’s a floor there. But in terms of what’s going to take what is already a fully valued company to the next level and lead to, either for me, P/E expansion, I don’t think AI is a story yet, or I don’t see it.”

Apple Inc (NASDAQ:AAPL) is desperately in need of new catalysts. The company’s revenue in China fell 8% in fiscal year 2024, following a 2% decline the previous year. The Chinese market accounts for about 15% of Apple’s total revenue, so this downtrend cannot be ignored.

Investors had hopes from the Wearables, Home, and Accessories segment, but so far its performance has been weak. Vision Pro faces tough competition from Meta’s $500 Quest and the more affordable Quest 3S, making it hard to justify its $3,500 price tag. The failure of Apple’s HomePod, unable to compete with Amazon’s and Google’s lower-priced offerings, further highlights the challenges in this market.

Apple’s iPhone 16 has not shown promising growth prospects yet and investors are still in a wait-and-see mode on the AI platform.

CDT Capital Management stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:

“The crowd. While this evolution in AI is going to change the world, market expectations for the technology have become unhinged. The crowd, which is more like an exuberant mob, anointed the Mag 7 with spectacular, nonsensical valuations based on the premise that AI will be an amazing, money-printing growth engine for these companies – and the truth is it likely will be. The problem is that the math just isn’t mathing.

Let me explain what I mean by picking on the world’s most valuable stock, Apple Inc. (NASDAQ:AAPL). For background, Apple does not have a robust homegrown AI platform, nor does it have a plan to meaningfully monetize AI from Apple users. Right now, from our perspective, Apple’s, Apple Intelligence strategy of implementing third-party AI tools to stay competitive will likely be more of a cost of doing business than an avenue for sales and yet in 2024, the stock soared +33% based on the AI dream as exemplified by the quote below.