One analyst estimates that Nvidia’s market cap could overtake Apple’s if the iPhone maker doesn’t launch generative AI products this year. Fernando Gutierrez-Juarez/Getty (L); NurPhoto/Getty
If Apple doesn’t soon offer services using artificial intelligence, the company risks being overtaken in value by Nvidia, says an analyst.
Currently, Apple is suffering a decline in iPhone sales in China.
Apple continues to shift its focus to generative artificial intelligence after scrapping its electric car project.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Is Apple lagging behind the tech competition as a driver of innovation? A lot depends on Apple’s push towards artificial intelligence (AI), writes an analyst on social media. The chip giant and AI pioneer Nvidia may soon overtake the iPhone manufacturer in terms of the company’s valuation on the stock market.
“If Apple fails to launch generative AI services that exceed market expectations this year, Nvidia’s value will most likely outperform Apple,” wrote Ming-Chi Kuo, a prominent Apple analyst, in a post on X, formerly Twitter. We translated the post from Chinese to English using Google.
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Apple is weakening, Nvidia is booming
The gap between Apple and Nvidia is already narrowing. Investors are buying shares in Nvidia in droves, which dominates the booming AI semiconductor market. Semiconductor chips are important for processing and executing AI.
Nvidia shares rose by 260 percent last year and reached a market capitalization of 2.06 trillion dollars, the equivalent of 1.88 trillion euros, at the close of trading on Tuesday. Meanwhile, Apple only increased by 13 percent and was valued at 2.78 trillion dollars – 2.54 trillion euros.
A big reason Apple needs to step up its generative AI efforts is sluggish iPhone sales. According to Kuo, the company was expected to ship between 220 and 225 million devices in 2024. Now it could be closer to 200 million by the end of the year, he said.
iPhone sales in China, a key market for the device, fell 24 percent in the first six weeks of 2024, according to a new report from market research firm Counterpoint Research. Vivo, a homegrown tech giant, now leads the smartphone market in the country, followed by Huawei and Honor.
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Instead of electric cars: Apple is driving AI
Apple appears to be accelerating its AI strategy, but still needs to catch up with OpenAI, Google and Microsoft. Last week, Apple ended Project Titan, according to the Bloomberg news agency. It was a multi-billion dollar, multi-year effort to develop self-driving electric cars that could compete with Tesla. Those leading the project reportedly said the car was canceled so the team could work on generative AI instead.
However, details about Apple’s initiative are not yet known. CEO Tim Cook has not made any official announcements yet. The company may be working on an AI coding assistant. It could compete with Microsoft’s Github Copilot and will soon be released for beta testing by developers, according to Bloomberg.
According to the agency, Apple may also plan to integrate AI features into software updates for the iPhone and iPad, as well as tools that could create Apple Music playlists and slideshows. “I think generative AI is a big opportunity for Apple,” Cook said in February on a conference call to discuss this year’s first quarterly results.
Apple and Kuo did not immediately respond to a request for comment from Business Insider before this article was published.
Read the original article Business Insider.