Apple shares reverse lower after big Siri news. Why we’re not bothered
Apple delivered what Wall Street had been waiting for: a complete AI overhaul, using Google’s Gemini in a new conversational Siri and updating the company’s in-house AI efforts. Just before the Siri news was announced at the company’s Worldwide Developers Conference (WWDC) on Monday afternoon, Apple shares rose more than 3%. We know that a single day’s stock movement is not the whole story; but by the end of the event, the stock was down more than 1%. Buy the rumor and sell the news? Maybe. The stock was on the rise heading into WWDC, setting an all-time intraday high at Monday’s session highs. Whatever the reason, we’ve seen these types of trading patterns at major Apple events before. What matters is what Apple announces, not how a fickle market buys and sells shares. AAPL 1D mount Apple 1 day Siri rebuilt. With artificial intelligence at its core, the personal assistant is more capable and conversational than ever. In fact, given what we’ve seen on stage, it now looks like a true personal assistant, not the simple, single-response chatbot we’ve come to know and ignore. This includes revamped, more personalized Siri, AirPods and CarPlay. Models can run both on-device and on private cloud servers; It offers enhanced privacy because the data resides on your device or is encrypted on cloud servers to the point that not even Apple can access it. We’d expect nothing less from Apple, whose reputation is as much about innovation as it is about user privacy. Screen awareness allows Siri to better understand your request in context and offer a more personalized response. Users will now be able to ask questions about what they are looking at on their screens. System-wide integration means Siri can do things like search all user content or open apps and enter information based on a request. For example, you can ask Siri to find an image or ask about a recent text message conversation without opening the Photos app. Whatever the question, the new data indexing methodology allows Siri to better track, access and provide information. Another example: If you ask for directions to a specific location, Siri will open the Maps app and instantly map out the route for your trip. Siri will also see third-party app integration, but it remains to be seen how developers will take advantage of the new capabilities. There is now also a dedicated Siri app. In addition to providing query history, the app means you can now start on one device and continue your conversation on another. This is perhaps the most notable upgrade because it will allow for deeper levels of investigation thanks to the ability to continue past conversations with all the context needed to avoid starting from scratch. While it’s still early days and more features are sure to arrive over time, WWDC likely met investors’ expectations as Apple offered users new AI-powered ways to navigate their devices. While past keynotes have been about demonstrators showing us how to use and navigate the operating system, this one was all about showing how you can ask Siri for the information you need and let the AI do the tedious work of searching for files and folders for you. With the foundations of Apple Intelligence now firmly in place, we think the company is in a much stronger position to not only drive the adoption of AI, but also benefit financially. Of course, there was a lot of excitement when Apple Intelligence was introduced at WWDC 2024, with lots of open-ended “more to come” style conversations. While the last two years have seen increasing progress in AI features, there have also been many stumbles; For the most part, it’s failed to elevate Siri in any meaningful way so far. But this time, Apple leaned on its old search buddy Google, whose Gemini AI is among the best in the industry. Apple will continue to work on its own AI models and has even announced the second version of its Apple Foundation Models. The best of both worlds. Apple doesn’t need to worry about having the best models in the world; It may allow Alphabet, which is currently at the forefront of the AI large language models (LLM) pack, to take care of this. Instead, the company can focus on its ecosystem and user experience; This is something he does better than anyone else. The company could also avoid spending billions of dollars on the LLM arms race. By leveraging its massive installed device user base, Apple can continue to attract more and more people into its high-margin services business. Given what we saw on Monday, we think the AI experience on Apple devices will only get better from now on. Therefore, we had to reiterate once again that Apple shares should be owned for the long term, not bought and sold. (Jim Cramer’s Charitable Trust is long AAPL, GOOGL. See here for a full list of stocks.) When you subscribe to the CNBC Investment Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT GUARANTEE IS MADE.
