Why Apple Needs to ‘Rip the Band-Aid Off' and Make This Move, According to Wedbush

Wedbush analyst Dan Ives recommends Apple (AAPL) acquire AI search engine Perplexity for up to $30 billion, more than double its current $14 billion valuation, to bolster its lagging AI strategy and enhance its delayed Siri, now anticipated by 2026. This strategic move is seen as crucial given Apple's perceived lag in AI compared to peers, the extended timeline for its in-house AI developments, and a recent high-profile AI executive departure to Meta, despite Apple shares being down 16% for 2025.

Analysis

A Wedbush analyst note posits that Apple (AAPL) is significantly lagging peers like Alphabet and OpenAI in the artificial intelligence race, a sentiment seemingly reflected in its stock's 16% decline for 2025. The core recommendation is for Apple to undertake a strategic acquisition of AI search engine Perplexity for as much as $30 billion, more than double its current $14 billion valuation, to accelerate its AI capabilities. This proposed M&A action is framed as a necessary step to counter significant internal setbacks, most notably the delay of its AI-enhanced Siri until at least 2026. The urgency is compounded by competitive pressures, evidenced by Apple losing its head of foundation models to Meta Platforms and its prior discussions with OpenAI and Anthropic for potential technology partnerships. The potential value of the target is underscored by Perplexity's own strategic move to launch a competitor to Google Chrome, a premium browser named Comet, indicating its technological ambition and potential to redefine Apple's AI strategy.

Key Decisions for Investors

• Investors should closely monitor Apple's M&A signals and AI strategy updates, as an acquisition of Perplexity would represent a significant strategic pivot to address its current competitive lag in artificial intelligence.
• The highlighted delay of the AI-enhanced Siri until 2026 and the recent high-profile executive departure to Meta signal potential internal execution risks that a costly acquisition may not fully resolve, warranting caution on the stock's near-term outlook.
• The suggestion to pay a premium of over 100% for Perplexity, at $30 billion versus its $14 billion valuation, introduces a high-risk, high-reward scenario that could significantly impact Apple's capital allocation strategy and future returns.
• Given Apple's AI challenges, it may be prudent to evaluate the relative strength of competitors like Alphabet and Meta, which are presented as having a current lead and are aggressively investing to maintain it.