Apple’s AI Strategy Is Pivoting. Here’s Why That Could Be Great News for the Stock.

Key Points

• Apple’s mobile operating system will soon integrate a number of third-party AI platforms into Siri itself.

• The reversed decision is an indirect acknowledgment that Apple’s in-house AI offerings weren’t going to be strong enough to compete soon enough.

• Although not a reason in and of itself to buy or own Apple stock, the move bolsters the bullish argument.

• 10 stocks we like better than Apple ›

How does the saying go? If you can’t beat ’em, join ’em?

After struggling for over a year to develop its own artificial intelligence (AI) assistant to truly compete with leading platforms like ChatGPT, Google’s Gemini, and Anthropic, that’s exactly what Apple (NASDAQ: AAPL) seems to be doing. According to well-circulated reporting from Bloomberg‘s Mark Gurman, citing “people with knowledge of the matter,” the upcoming release of iOS 27 is expected to readily accommodate these rivals to Apple’s own Siri, and even be used to power Apple’s onboard AI assistant Siri itself.

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It’s a sweeping reversal of Apple’s strategy, which has specifically sought ways to encourage iPhone, iPad, and Mac users to utilize features outside of Apple’s iOS ecosystem; official partnerships have been rare as well as somewhat limited in terms of functionality and accessibility. Soon, however, Apple device owners should be able to easily choose any number of familiar AI assistants in a featured portion of its popular App Store.

Image source: Getty Images.

Presumably, any paid versions of these tools will also generate the usual 30% commission Apple collects when it sells third-party apps.

Turning lemons into lemonade

Yes, in many ways, this is a tacit confession that Apple knows it’s never going to be able to catch up with already-established AI competitors. This is still arguably fantastic news for existing and future Apple shareholders, though, for a couple of reasons.

First (and arguably foremost), it ends a tortured year of efforts to build something that’s not exactly in Apple’s developmental wheelhouse.

While few would argue that the company doesn’t make the world’s very best mobile devices and then create seamless user experiences, artificial intelligence and its underlying large language models require a great deal of know-how. Not only did Apple get a late start in this race, but what little AI executive expertise it did have at its disposal was lost to competitors in the midst of last year’s chaotic regrouping of its AI efforts.

As for the other big benefit of the bold move to make iOS capable of integrating third-party AI assistance, it could actually spark new sales growth for its stagnant iPhone business by allowing consumers to stick with what may well eventually be their most important mobile app, while also allowing them to use this app on the world’s best mobile hardware. Although this is in contrast with what worked so well for Apple in the iPhone’s early days, in the modern market environment, such flexibility has come to be expected.

Bolstering the already-bullish argument

Don’t read too much into the matter. A subpar Siri didn’t necessarily spell doom for Apple, while allowing iOS users to integrate their choice of AI technology into their iPhones won’t create a sudden swell of buying interest in the already-popular smartphone. Mostly, this will just maintain the marketplace’s current status quo.

That status quo is one of long-term growth — one where Apple remains a brand with a wildly loyal customer base, and one where Apple’s iOS is slowly starting to gain market share at Android’s (Google’s mobile operating system) expense, according to data from Statcounter. That, paired with Apple stock’s 11.3% pullback from its December peak, doesn’t make for a bad bullish argument here, if you’re truly thinking long-term.

Just bear in mind that the short-term disruption of AI stocks may not have run its full course just yet.

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James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Apple and is short shares of Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.