AppleIt is (NASDAQ:AAPL) The Worldwide Developers Conference (WWDC) last week sparked new interest in the title and allowed it to reach new all-time highs. However, there are some winners and losers associated with its main announcement about Apple Intelligence and its general view of artificial intelligence (AI).
So who are the winners and losers in this conference? The answers might surprise you.
Winner 1: Taiwan Semiconductor Manufacturing
For me, there is a clear winner in this announcement: Semiconductor manufacturing in Taiwan (NYSE:TSM). Taiwan Semi’s business is already doing well, but it just received a catalyst. In 2021, 2022 and 2023, Apple’s sales accounted for 26%, 23% and 25% of TSMC’s revenue, respectively. The smartphone industry has struggled recently, but that could quickly turn around.
Since Apple Intelligence will only be available for iPhone 15 models and newer, it isolates about 90% of older generation iPhone users. If Apple Intelligence becomes the latest must-have technology, it could spark new demand for iPhones.
Much of Taiwan Semi’s revenue from this business could benefit.
Winner 2: Microsoft
Microsoft (NASDAQ:MSFT) is also a big beneficiary of this announcement. Because Apple chose to partner with OpenAI (the maker of ChatGPT), it selected the company in which Microsoft has heavily invested. This also validates its use of ChatGPT across its entire Microsoft Office suite, as it will create a fairly seamless experience for millions of people. people who use Office products and iPhones daily.
While iPhones are expected to run most of these workloads on the smartphones themselves, some of them may need to be outsourced to servers due to the arduous nature of the AI ​​model. When this happens, it will happen on Microsoft Azure car servers this is where OpenAI deployed its technology. This will also be an increased source of revenue for Microsoft.
Loser 1: Alphabet
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Google’s parent company, finds itself on the wrong side. Alphabet’s generative AI model, Gemini, competes with ChatGPT. Apple could have chosen Gemini as the model on which to run its Apple Intelligence, because it would have been a logical continuation of its partnership.
This breaks with the tradition of collaboration between Google and Alphabet: the Google search engine is the default on Apple products, because Alphabet pays for it. Recently, this was the subject of an antitrust lawsuit, which may have influenced Apple’s decision to choose ChatGPT over Gemini.
Either way, Gemini is not Apple’s choice for its Apple Intelligence, and it’s a lost opportunity for Alphabet.
Loser 2: Apple
My latest loser is Apple, which may come as a surprise. Apple will likely experience an increase in demand for its iPhones, leading to an increase in sales. But that’s not the point I’m trying to make.
Apple is a massive company with resources few people can dream of. It has armies of software engineers and more than $60 billion in cash and marketable securities on its balance sheet at the end of its fiscal second quarter (ending March 30). Yet he couldn’t create his own generative AI model in-house?
This shows how far behind Apple is in the AI ​​race, as it was completely caught off guard. Due to partnering with an external company, there will always be questions about data security and what information is shared with other companies. If it remained internal, these questions would not be as relevant.
Instead, it could be the Achilles heel of a product that otherwise seems solid. Although Apple will likely see an increase in sales, the long-term ramifications of do not integrate this technology internally could be problematic for Apple.
Should you invest $1,000 in Apple right now?
Before buying Apple stock, consider this:
THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now…and Apple wasn’t one of them. The 10 stocks selected could produce monster returns in the years to come.
Consider when Nvidia made this list on April 15, 2005…if you had invested $1,000 at the time of our recommendation, you would have $801,365!*
Equity Advisor provides investors with an easy-to-follow plan for success, including portfolio building advice, regular analyst updates, and two new stock picks each month. THE Equity Advisor the service has more than quadrupled the return of the S&P 500 since 2002*.
*Stock Advisor returns June 10, 2024
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury holds positions in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool holds positions and recommends Alphabet, Apple, Microsoft and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.
2 winners and 2 losers from Apple’s latest artificial intelligence (AI) announcement was originally published by The Motley Fool
