Josh Brown says if Apple announced a deal with Perplexity AI, the shares would hit a record that very day

Apple is reportedly discussing a potential acquisition of AI startup Perplexity AI, a move that Josh Brown of Ritholtz Wealth Management suggests would significantly boost Apple's stock to a new all-time high. This comes as Apple's AI efforts have underperformed, contributing to its shares being down over 9% year-to-date, and a deal could address investor concerns regarding its AI strategy and potentially signal future leadership succession. However, Brown expresses skepticism that Apple will proceed, citing the company's historical reluctance to make large acquisitions.

Analysis

Apple (AAPL) is reportedly exploring an acquisition of AI startup Perplexity AI, a strategic move aimed at addressing significant investor concerns over its lagging position in the artificial intelligence race. The company's stock has underperformed its Magnificent Seven peers, declining over 9% year-to-date, reflecting market disappointment with its initial AI product launches. According to analysis from Ritholtz Wealth Management's Josh Brown, a successful acquisition would be a major catalyst, potentially driving the stock to a new all-time high by signaling a decisive commitment to AI innovation. The muted immediate market reaction, with shares rising just 0.1% on the news, suggests the market views the deal as speculative. This skepticism is echoed by Brown, who, despite highlighting the potential benefits, noted Apple's historical aversion to large-scale acquisitions makes the transaction unlikely. The discussion also introduces a long-term governance angle, speculating that Perplexity AI's CEO could be positioned as a potential successor to Tim Cook, further underscoring the deal's strategic importance beyond just technology acquisition.

Key Decisions for Investors

• Investors should monitor news surrounding the potential Perplexity AI acquisition, as a confirmed deal would likely serve as a significant short-term catalyst, given the current stock price does not appear to factor in this possibility.
• Given Apple's historical reluctance to execute large deals, the acquisition should be viewed as a speculative upside scenario rather than a core thesis, and focus should remain on the company's organic AI development pipeline.
• The stock's 9% year-to-date underperformance highlights the market's pricing of AI-related risk, and a failure to deliver a compelling AI strategy, whether through M&A or internal innovation, may present continued headwinds for the shares.