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Apple Faces Investor Pressure to Revamp AI Strategy After $630B Loss
Apple is under mounting pressure to rethink its artificial intelligence approach following a $630 billion drop in market value this year. Investors are calling on the iPhone maker to pursue bold mergers and acquisitions, inject fresh AI talent, and pivot from its traditionally conservative innovation strategy. The company’s underwhelming AI rollout and regulatory headwinds have intensified calls for a decisive shift in leadership and direction.
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Investors Demand Strategic Shift as Apple Trails AI Leaders
Analysts say Apple’s sluggishness in artificial intelligence has amplified its stock’s underperformance in 2025. The company’s shares have dropped 16% year-to-date, underperforming peers like Meta Platforms Inc. and Nvidia Corp., both of which have seen gains driven by aggressive AI spending. According to Citigroup Inc. analyst Atif Malik, Apple’s resistance to large-scale acquisitions is now a liability.
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“Historically, Apple does not do big mergers and acquisitions,” said Malik, referring to Apple’s last major purchase—a $3 billion acquisition of Beats in 2014. “But investors would turn more positive if Apple could acquire or invest a meaningful stake in an established AI provider,” he added.
Market watchers highlight Perplexity AI as a viable target. Reports from June indicate that Apple has internally discussed a possible acquisition of the startup, which is currently valued at over $14 billion. If completed, such a deal would signal a major course correction for Apple’s AI ambitions. Wedbush analyst Dan Ives endorsed the move, calling the acquisition a “no-brainer,” even if it costs Apple up to $30 billion.
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Tariffs and Court Losses Add to Apple’s Headwinds
Apple’s financial woes go beyond AI. In April, the company suffered a significant blow after former President Trump introduced reciprocal tariffs that directly impacted firms with heavy manufacturing footprints in China. Apple’s shares plunged 19% within three days of the announcement. Although the tariffs were later paused, Apple’s stock did not recover, weighed down by legal and regulatory setbacks.
One of the biggest legal hurdles was the company’s failed attempt to overturn a ruling by US District Judge Yvonne Gonzalez Rogers, which allows app developers to direct users to external payment systems without paying Apple’s commission. The court also found Apple in violation of a 2021 injunction, further denting its credibility. Developers like Epic Games, Spotify, and Amazon have already bypassed Apple’s in-app payment ecosystem, reducing revenue from the App Store.
Meta’s Talent Poaching Highlights
Meta has taken a more aggressive approach to artificial intelligence—and it’s paying off. CEO Mark Zuckerberg has poured billions into AI ventures, including a $14.3 billion investment in Scale AI, and has actively recruited top-tier talent. Apple recently lost Ruoming Pang, the head of its foundational AI models team, to Meta’s new “superintelligence” division.
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Pang, who joined Apple in 2021 from Alphabet, was leading a 100-person team responsible for developing large language models to power Apple Intelligence features. Sources familiar with the matter said Apple declined to match the lucrative offer Meta presented. This loss, according to analysts, has cast doubt on Apple’s internal commitment to AI.
Kevin Cook, senior strategist at Zacks Investment Research, urged Apple to emulate Meta’s aggressive recruitment strategy. “A refocus on AI talent is what’s needed,” Cook said. However, he cautioned that the AI concerns surrounding Apple were being overstated and stopped short of calling for drastic corporate changes.
Top Management Shake-Up Indicates Potential AI-Related Interest
Executive shake downs in Apple could be an indication that the company is ready to turn around. Jeff Williams, Chief Operating Officer has announced his retirement after more than ten years at the post. Luca Maestri, who serves as a former CFO, resigned during the last year. Though chief executive officer Tim Cook continues to hold the reins, the company is set to implement a wider managerial change according to sources who spoke to the Bloomberg News.
LightShed Partners analysts claim that the shake-up in leadership is what Apple currently needs. According to analysts Walter Piecyk and Joe Galone, writing in a note to clients on July 9, failure to exploit AI correctly might change the future direction of the company and its capacity to grow at all.
Paul Meeks, a senior analyst at Water Tower Research pointed towards the necessity of making a bold move. Such a big investment deal would not only support them with AI but it will demonstrate that it is serious about a culture change and course correction, Meeks added. It can not do the AI by itself.
Although all this happens, Apple is not short of resources. The company has reserves of more than 100 billion dollars in cash and marketable securities as of March 2025 and can easily invest into AI infrastructure, people, or buyouts.
The policy of conservatism toward AI that is held by Apple is not considered a virtue anymore. Investors are expecting the firm to take big steps after shedding more than 630 billion dollars of its market value and competitors gaining momentum. Either by acquiring Perplexity AI, remodeling the management, or by overtaking the brightest AI minds, the success of Apple may hang on how quickly it can get into high gear. Financially, the company is still stronger than ever, though its future decision will define whether it will continue being a leader when it comes to new technologies, or that it will lose to bolder rivals.
