Can Apple catch up to its rivals in the AI race?

Despite Apple's traditionally insular approach to innovation, the company is reportedly looking externally, including a possible deal with Perplexity AI, to breathe life into its AI assistant Siri. However, with features announced in June yet to materialize in a meaningful way, and competitors like Microsoft and Meta surging ahead, investors are wondering whether Apple can pivot fast enough to reenter the AI race.

How is Apple's stock performance compared to other tech giants?

Year-to-date, Apple shares are down nearly 17%, ranking among the bottom 15 in the Nasdaq 100 and underperforming every member of the Magnificent Seven aside from Tesla. Despite the decline, the stock still trades at nearly 28 times forward earnings, well above its 10-year average and higher than peers like Meta, Alphabet, and Amazon.

What are the key challenges facing Apple in its upcoming Q3 earnings?

Analysts expect Apple to report just a 2.4% bump in profit and a 4.1% lift in revenue - figures that trail far behind the broader tech sector's double-digit growth. Additionally, the company's AI efforts are seen as underwhelming compared to rivals, raising concerns about its ability to pivot and reenter the AI race.

Home / Business and Economy / Apple's AI Woes: Struggling to Keep Pace as Rivals Surge Ahead

Apple's AI Woes: Struggling to Keep Pace as Rivals Surge Ahead

31 Jul

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Summary

Apple's Q3 earnings expected to trail tech sector's double-digit growth
Apple's AI efforts seen as underwhelming compared to Microsoft and Meta
Apple's stock down nearly 17% year-to-date, underperforming tech giants

Apple's AI Woes: Struggling to Keep Pace as Rivals Surge Ahead

As of July 2025, Apple is heading into its fiscal Q3 earnings call with a heavy cloud hanging over it. Analysts expect the tech giant to report just a 2.4% bump in profit and a 4.1% lift in revenue - figures that trail far behind the broader tech sector, which is tracking double-digit growth.

Year-to-date, Apple shares have declined nearly 17%, ranking among the bottom 15 in the Nasdaq 100 and underperforming every member of the Magnificent Seven aside from Tesla. Despite the stock's decline, it still trades at nearly 28 times forward earnings, well above its 10-year average and higher than peers like Meta, Alphabet, and Amazon - companies that are showing faster growth and stronger AI traction.

This AI gap is becoming harder for investors to ignore. While Microsoft just delivered a strong beat on cloud-driven demand and Meta issued bullish guidance after heavy AI investment, Apple's AI story remains underwhelming. Features announced in June have yet to materialize in a meaningful way, and reports suggest the company is now looking externally, including a possible deal with Perplexity AI, to breathe life into Siri. Apple's traditionally insular approach to innovation may be holding it back just as its competitors are accelerating, leaving investors wondering whether the company can pivot fast enough to reenter the AI race.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.