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There's constant speculation about how Apple plans to catch up in the AI space. Currently, rumors are circulating that Apple might acquire an AI search company like Perplexity to accelerate its progress. This sounds like a logical step—after all, many tech companies are committed to such deals. But not everyone thinks it makes sense. Morgan Stanley, for example, clearly warns against it.
Apple is under scrutiny. Not only because of its upcoming quarterly results, but also because of the question of how the company is positioning itself in the field of artificial intelligence. Expectations are high, and so is the pressure. In a recent report, Morgan Stanley clearly speaks out against the idea of Apple acquiring an AI search engine. The reason is simple: It doesn't fit with its strategy.
Morgan Stanley sees takeover idea as “misguided”
Morgan Stanley analyst Erik Woodring makes it clear that, in his opinion, it would not be a good idea for Apple to acquire a company like Perplexity . He considers the idea that such an acquisition would help improve Apple's position in the AI race to be false. Woodring makes it clear that Apple has no intention of getting involved in the search engine business at all. The company is heading in a different direction. The report does acknowledge that Apple is not particularly advanced in the field of artificial intelligence. No major progress is expected for Apple Intelligence in the coming September quarter either. Nevertheless, AI remains an important long-term factor in Apple's development – just not via its own search engine.
Outlook for the quarterly figures as of July 31, 2025
Morgan Stanley expects Apple to deliver a strong third quarter despite AI skepticism. It raised its revenue forecast to $90.7 billion, representing growth of 5.8 percent year-on-year. The reasons: better-than-expected iPhone shipments, higher average selling prices, and continued strong demand for iPads and Macs. Morgan Stanley also expects stable figures for the services segment. Despite the legal uncertainties surrounding the App Store and Apple's decision not to issue a forecast at its last annual press conference, the report sees no signs of a slowdown. On the contrary: The services division is expected to grow by 11.6 percent year-on-year.
Assessment of Apple shares remains positive
Woodring maintains his overweight recommendation on Apple stock. This means he expects Apple to outperform the overall market. His price target is $235. This is higher than the current targets of other major banks – HSBC expects $220, JPMorgan $230.
Apple pursues a long-term AI strategy
Apple will not acquire an AI search engine—at least not if Morgan Stanley has its way. The analyst report makes it clear that Apple wants to leverage its strengths differently. Instead of making quick acquisitions, the company is focusing on long-term integration, user experience, and strategic control. While Apple remains under scrutiny in the AI space, the coming quarter could show that a focused approach also pays off financially. (Image: Apple)
Disclaimer: No recommendation for investments
This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.
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