Apple’s AI Makeover Begins: With Solid Earnings, Cook Eyes Big Moves — Including a Perplexity Deal?

TradingKey - Apple (AAPL.US) delivered better-than-expected results for its fiscal third quarter of 2025, covering the second calendar quarter. The strong performance was driven by tariff-driven consumer spending and a rare rebound in the Chinese market. CEO Tim Cook  signals a strategic shift in the earnings call, stating that the company is significantly increasing investment in artificial intelligence and is open to acquiring external companies to accelerate its AI development — raising the possibility that Apple may soon acquire AI startup Perplexity.

While major tech rivals such as Google, Microsoft, and Meta are advancing rapidly in AI, Apple has lagged in public-facing innovation. This delay has weighed on investor sentiment, with Apple’s stock down about 17% year-to-date, while the S&P 500 and Nasdaq have reached new highs.

Ahead of the earnings release, Wedbush Securities recommended that Apple abandon its reliance on internal development and instead pursue strategic acquisitions to close the AI gap. 

The firm argued that Apple’s long-standing preference for in-house innovation has not yielded meaningful progress in AI, citing the limited AI announcements at the recent WWDC and the delayed rollout of an upgraded, AI-powered Siri.

Wedbush suggested that acquiring Perplexity AI, even at a price as high as $40 billion, would be a worthwhile investment. 

The firm warned that failure to act decisively could leave Apple facing a significant strategic setback in the AI era.

Apple is also grappling with a growing talent exodus in its AI division. In July alone, four senior AI researchers left the company, joining Meta to support its “Super AI” initiative — a move that underscores the competitive pressure Apple faces in retaining top technical talent.

Wedbush highlighted the contrast between Apple’s cautious approach and Meta’s aggressive strategy of talent acquisition and R&D investment, which has allowed Meta to catch up and even lead in certain AI applications.

During the July 31 earnings call, Cook confirmed that Apple is reallocating resources and increasing spending to prioritize artificial intelligence. He emphasized that the company’s goal is to make advanced technologies intuitive and accessible, forming the core of its AI strategy.

Cook also revealed that a more personalized, AI-driven version of Siri is on track for a 2026 launch. The company is actively considering acquisitions to strengthen its AI capabilities and remains open to deals that could accelerate its product roadmap.

The combination of strong financial results and a clear pivot toward external innovation has increased market speculation that Apple may soon acquire Perplexity. 

The startup, known for its AI-powered, citation-based search engine, aligns well with Apple’s focus on privacy, user experience, and mobile-first design. Such a deal would provide Apple with advanced AI technology, engineering talent, and a faster path to competitive AI products.

As Apple begins to shift from internal development to a more aggressive, acquisition-driven strategy, investor expectations are rising. While no deal has been announced, the company’s intensified focus on AI suggests a new phase in its technological evolution is underway.