Just ahead of Apple’s Q3 2025 earnings report, Wedbush analysts have delivered a harsh assessment of the company’s progress in artificial intelligence. As reported by Apple Insider, the analysts claim Apple’s internal AI development efforts are a “failure,” and call on CEO Tim Cook to take bold action by acquiring Perplexity AI.
Apple will announce its quarterly results on July 31, and while Wedbush expects overall strong performance—thanks in part to revenue recovery in the Chinese market—they emphasize that the company’s AI initiatives are falling behind.
According to Wedbush’s research in Asia, iPhone sales have remained steady this quarter, and Apple’s services business continues to lead growth. However, the firm believes Apple has yet to fully unlock its potential, particularly in the field of AI.
Looking ahead to the iPhone 17 launch in September, analysts predict the new lineup will be a central focus of the upcoming earnings call. With over 20% of the world’s 1.5 billion active iPhones being more than four years old, a significant upgrade cycle is anticipated.
Despite this, Wedbush is concerned about Apple’s slow progress in generative AI. The long-delayed Siri upgrade has become symbolic of these struggles. At this year’s WWDC, Apple barely touched on AI, even as competitors made major announcements in the space.
The report claims it’s now evident that Apple’s AI breakthroughs are not coming from within. While the company has historically preferred internal development, Wedbush argues this approach is outdated in the rapidly evolving AI landscape.
Analysts believe Apple must act decisively by acquiring Perplexity AI—even if it costs as much as $40 billion. The AI startup is seen as a valuable asset that could help Apple catch up with rivals like OpenAI, Google, and Microsoft. Failure to act could lead to what the report calls a “historic strategic humiliation.”
Wedbush estimates that if Apple can establish a clear and profitable AI strategy, it could add up to $75 per share in long-term value. The urgency is clear: either Apple makes a high-impact move, or it risks falling permanently behind in the AI race.
