Doug Clinton, CEO of Intelligent Alpha and Co-founder of Deepwater Asset Management, believes Apple Inc. (NASDAQ:AAPL) and Amazon.com Inc. (NASDAQ:AMZN) are lagging in the artificial intelligence race compared to their tech giant peers.
Check out Apple’s stock price over here.
Which Stocks Does The AI Stock Picking Model Prefer?
According to his conversation with Yahoo Finance, Clinton’s AI-driven models have been avoiding the two, favoring instead companies with more robust AI narratives.
“The four companies that our AI models are fans of at the moment do have very strong AI businesses,” Clinton stated, identifying them as Nvidia Corp. (NASDAQ:NVDA), Microsoft Corp. (NASDAQ:MSFT), Meta Platforms Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL).
“We have not been in on Apple or Amazon, and I think there’s a really interesting distinction between those two,” Clinton explained.
He argued that the AI stories for both companies are “a little bit weaker” than their counterparts. This sentiment from Deepwater’s models suggests that, from a quantitative perspective, the AI strategies of Apple and Amazon are not as compelling as those of their competitors, who are seen as having more established and powerful AI-driven business segments.
Apple Can Still Pull Out ‘A Win In The Future’
Addressing the viewpoint of his Deepwater co-founder, Gene Munster, who argues that Tim Cook has time to develop Apple’s AI strategy, Clinton conceded that Apple benefits from its massive, loyal user base.
“Look, if Apple didn’t have this incredible user base… they might look more like an Adobe,” Clinton said, referencing Adobe’s stock struggles amid fears that AI could disrupt its core business.
He believes this gives Apple a unique advantage. “Apple is probably getting some benefit of the doubt that they can come into this race late, as they often do, still show a really great product, and then ultimately maybe pull out some kind of a win in the future.”
Apple Still Has Two Years To Develop Its AI Strategy
Munster’s core argument is that Apple has a roughly two-year window to solidify its AI strategy, supported by a dedicated customer base that owns multiple devices and uses its services.
He notes that while competitors like Google, Meta, and Microsoft have significantly ramped up AI-related capital expenditures since 2021, Apple’s AI strategy has remained flat. However, Munster believes investor expectations for Apple’s AI are so low that even minor advancements could significantly boost market sentiment, creating a “low bar” for the tech giant to clear.
Price Action
Apple fell 0.30% to $230.89 on Monday and rose 0.0087% in after-hours trading. It has lost 5.31% on a year-to-date basis and gained 2.21% over the past year.
Benzinga's Edge Stock Rankings indicate that AAPL maintains a stronger price trend in the short, medium, and long terms. However, the stock scores poorly on growth and value rankings. Additional performance details are available here.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended slightly below the flat line on Monday. The SPY was down 0.022% at $643.30, while the QQQ declined 0.040% to $577.11, according to Benzinga Pro data.
On Tuesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading lower.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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