Once lauded as one of the best-performing stocks in the world, Apple (NASDAQ: AAPL) has had a rough time since the start of 2024.
Already in January, the company lost its top spot as Microsoft (NASDAQ: MSFT) managed to overtake it as the world’s biggest company by market capitalization, and by June, Nvidia (NASDAQ: NVDA) is threatening to relegate it to third place.
On the business side, things have been mixed. While Apple remained a smartphone titan, it gave up on its multi-year ambition to enter the electric vehicle (EV) market.
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A frequently cited reason for AAPL shares’ lackluster stock market performance has been its failure to take part in the ongoing artificial intelligence (AI) boom in stark contrast to technology giants like Microsoft, which entered the race already in 2019 with a partnership with OpenAI.
Apple has, so far, made several attempts to enter the AI sector, with the most recent – and likely the most significant one – happening on June 10 at the firm’s Worldwide Developer Conference 2024.
Apple set to bring ChatGPT to the iPhone
Specifically, Apple announced it has partnered with OpenAI to integrate ChatGPT into its operating systems for computers, smartphones, and tablets.
Unlike what may have been expected given the rise of companies like Nvidia and Super Micro Computer (NASDAQ: SMCI), the announcement had little impact on Apple’s stock price.
In fact, both in the leadup to the conference and in its immediate aftermath, Apple continued falling. The big tech firm is, by the time of publication, up a mere 4% in the year-to-date (YTD) chart but down 0.88% in the last 5 days of trading and down 1.91% in the last full session.
The partnership has also not helped the performance since the shares fell from a daily high of $197.29 after the announcement.
Is AI losing its luster?
The recent changes in public perception of AI may provide a glimpse into the reasons behind such a lack of reaction to the type of news many have to expect to drive significant rallies.
Earlier in 2024, Microsoft announced it will be integrating artificial intelligence with Windows 11 but the proposed implementation has spawned significantly more concerns and a general disgruntlement than excitement.
Similarly, the recent discovery of Adobe’s (NASDAQ: ADBE) changed policies sparked outrage and accusations that the firm shall use its users’ art to train its AI.
Accusations of significant intellectual property (IP) violations have long been leveled at the AI industry, and ADBE’s move was hardly welcomed given that users were faced with either accepting to share rights with the company or losing access to software that is instrumental for the creative industries.
For its part, Adobe has denied an AI connection and has generally attempted to brush off the accusations.
Additionally, Pew Research Center’s polling results from late 2023 show a growing public dissatisfaction with artificial intelligence. More than 50% of polled Americans were more concerned than excited about AI last November, compared to 38% in 2022.
A revolution or a buzzword?
Another reason behind the lack of a strong and positive reaction to Apple’s announcement may be fatigue.
Thanks to the effects AI technology has had on Nvidia’s stock, the term has been increasingly used as a buzzword, with some companies accused of having just slapped the label on their existing products while offering no changes other than a price bump.
This use – maybe even abuse – or artificial intelligence may have caused a ‘metaverse’ effect and led to a term that once served as a magnet for investment losing all meaning and becoming more of a meme than a viable business strategy.
On top of the issues of overuse, there are no guarantees that the current iteration of AI technology will lead to the so-called artificial general intelligence (AGI) – arguably an end-goal of the research as it would lead to actual machine autonomy.
Indeed, the current artificial intelligence platform may ultimately – despite the undeniably impressive advancements made by companies such as OpenAI – end up being what gunpowder was for the atomic bomb: a way to make a boom, but of a very different variety.
Is Apple becoming a technological follower?
Finally, it is also possible that Apple’s struggles are partially linked to it needing to make an agreement with OpenAI.
For a long time, Apple was seen – and rightly so – as a major innovator, and its lack of an in-house AI model may have helped damage that image and turn AAPL into a follower and not a leader.
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