• Investors and analysts are pivoting their focus from Apple's managed tariff risks to its lagging artificial intelligence strategy.
  • Wedbush analysts suggest aggressive moves, including potential acquisitions like Perplexity or a deeper collaboration with Google's Gemini AI.
  • The firm maintains an Outperform rating and a $270 price target, betting on Apple's upcoming iPhone 17 event to reset AI expectations.

With supply chain moves largely insulating it from tariff pressures, Apple Inc. is facing a new, more pressing concern from Wall Street: the need to accelerate its artificial intelligence playbook. According to analysts at Wedbush, the company’s main challenge is no longer geopolitical trade winds but its perceived lag in the intensely competitive AI race.

The shift in focus comes as Apple has successfully reorganized its supply chain, committing over $500 billion in U.S. investments and increasing domestic manufacturing. This has mitigated one major risk, allowing investors to scrutinize the company's next strategic chapter. "The tariff overhang has been largely managed through these operational shifts," said one analyst familiar with the matter. "The real question now is about AI competitiveness and how quickly Apple can close the gap."

Wedbush analysts are advocating for aggressive action, suggesting the tech giant should pursue strategic partnerships or even acquire a company like AI startup Perplexity to rapidly bolster its capabilities. The recent antitrust ruling against Google is also seen as a potential catalyst, potentially smoothing the path for a deeper integration of Google's Gemini AI into Apple's ecosystem. Such a collaboration could serve as a critical bridge while Apple continues developing its proprietary, on-device Apple Intelligence features, which initially underwhelmed some users upon their late-2024 introduction.

Internally, Apple is making massive investments to position itself as a leader in private, sovereign AI infrastructure, with a focus on security and reliability. The company has earmarked significant capital for AI data centers and is hiring thousands of new employees focused on AI and machine learning. A company spokesperson reiterated CEO Tim Cook’s previous comments on "ongoing large-scale investments in AI," though they declined to comment on specific partnership or acquisition rumors.

The upcoming iPhone 17 event is widely viewed by the Street as a pivotal moment for Apple to demonstrate tangible progress and rekindle investor enthusiasm. The expectation is for deeper, more seamless AI integration that justifies the device's premium pricing—the iPhone 17 Pro now starts at $1,099 for 256GB. Without a clearly articulated and competitive AI vision, some analysts worry the company could risk longer upgrade cycles as consumers wait for more compelling features.

Despite the concerns, Wedbush maintains an Outperform rating on Apple stock with a $270 price target, signaling a belief that the company can navigate this transition. The broader consensus suggests that while Apple may be late to the generative AI party, its long-term strategy of defining AI as personal, private, and on-device could yet challenge the cloud-centric models of its rivals.