Benzinga - by Shanthi Rexaline, Benzinga Editor.
Apple, Inc. (NASDAQ:AAPL) has been late to the artificial intelligence party, and so a mention of the technology by CEO Tim Cook in his prepared remarks on late Thursday’s earnings call got Deepwater Asset Management’s Gene Munster excited. The tech giant reported forecast-beating first-quarter results, thanks to strong Services business momentum and year-over-year growth for all its product categories.
What Happened: While discussing Vision Pro, Cook said the company will continue to invest in innovative technologies like these and others that will shape the future. “That includes artificial intelligence where we continue to spend a tremendous amount of time and effort and we are excited to share the details of our ongoing work in that space later this year,” he said.
Commenting on this, Munster said in a post on X, formerly Twitter, “Bingo! Tim Cook used the letters ‘AI’ in prepared remarks for the first time, saying AI is important to Apple’s future.”
“I still believe we will see a generative AI model at WWDC. Welcome Apple to generative AI steamroller.”
While answering an analyst’s question on whether capex is a constraint for setting aside investment for developing a generative AI platform, CFO Luca Maestri said, “We have always said we will never underinvest in the business.”
“We will continue to invest in every area of the business at the appropriate level and we are very excited about what is in store for us for the rest of the year.”
Why It’s Important: Ever since OpenAI’s ChatGPT kickstarted an AI revolution in early 2023, the hot technology has pervaded into all realms of businesses and consumers’ lives. Microsoft Corp. (NASDAQ:MSFT) was quick to seize the opportunity by deepening its relationship with OpenAI through a $10 billion investment.
Microsoft’s rival in the Search business, Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) has also plunged headlong into this tech. CEO Sundar Pichai said on the earnings call this week the company has used AI to improve many of its products from search to advertising to most of its consumer and enterprise products.
Nvidia Corp.‘s (NASDAQ:NVDA) name has become synonymous with the technology due to the fact that its AI accelerator chipsets power most AI training and applications. As the AI opportunity translates to strong revenue growth, Nvidia stock has been setting record after record. Sensing the AI opportunity, Meta Platforms, Inc. (NASDAQ:META) has pivoted from metaverse to AI.
Despite the buzz, Apple hasn’t committed to anything yet regarding its AI plans. In mid-July, Bloomberg reported that Cupertino has built its own framework to create large language models known as “Ajax” and created a chatbot service that some engineers call “Apple GPT.”
Price Action: Apple fell 3.06% to $181.14 in after-hours trading on Thursday, according to Benzinga Pro data, dragged by China weakness and lackluster guidance.
Photo courtesy: Apple
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