For a long time, investors worried about Apple’s hesitant AI engagement. But analyst Ben Reits from Melius Research believes that this should develop for the icon.
• Apple is careful when it comes to AI
• Partnerships with Openaai and apparently Alibaba
• Apple sees analyst at the advantage
For over a year now, the motto on the stock market has dominated that artificial intelligence is the way to success. It seemed all the more astonishing that Apple had emphasized even in his recent profit notification to pursue a “very careful and well thought -out approach” in his investments.
Focus on free cash flow
According to “Marketwatch”, Ben Reitzes by Melius Research is of the opinion that this could ultimately prove to be the better way. Because, by using the technologies of other companies, Apple can basically “pass on” investment and operating expenses to other tech giants, according to the analyst. “As a result, Apple can generate a free cash flow that is currently above the net profit, while sales will increase in the next few years – which many other companies have not succeeded,” said the analyst. In contrast to Apple, Alphabet, Amazon, Meta Platforms and Microsoft want to significantly increase their AI investments, but this will ultimately burden their free cash flow.
According to Ben Reits, however, this financial report on Wall Street could be examined more in the future: “Apple could have the last laugh because it is a real ‘toll road’ for mobile AI,” he wrote. “While critics concentrate on” builds “and microdata points, it is the free cash flow that counts in the end. Apple can enter into a partnership with Openaai (and possibly with Baidu in China), while it uses public cloud services to train models and operate its service business”.
Reits pointed out that Apple generated a free cash flow of $ 109 billion in the 2024 financial year, which is above the net profit of $ 104 billion. In contrast, the relationship between free cash flow and net profit for the cloud companies look more worrying.
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Apple’s AI partnerships
A large part of the functions of “Apple Intelligence” started a lot late, namely only last October, the group from Califonic Cupertino started a large part of the functions of “Apple Intelligence”. These AI functions are introduced gradually, for example Openais Chatbot Chatgpt with the publication of the operating systems iOS 18.2, Ipados 18.2 and MacOS Sequoia 15.2 In mid-December 2024 integrated into the language assistant Siri.
In China, the US group took even more time. Just a few days ago, the Reuters news agency reported that Apple probably agreed to cooperate with the Chinese Tech Group Alibaba in order to introduce AI functions for iPhone users in China after the icon also evaluated AI models from other Chinese tech companies, such as Baidu, Tencent, Bytedance and Deepseek. Apple and Alibaba have already presented their jointly developed AI functions to the Chinese cyberspace regulatory authority for approval and want to launch the services in April, the report said.
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