Yet Apple has struggled to launch notable AI features smoothly, and its underwhelming rollout of Apple Intelligence, its first attempt at AI, compelled the company to reorganize its AI team.
The good news is that Apple’s iOS remains one of the stickiest consumer ecosystems, which buys time for Apple to figure things out. People buy Apple products and use them for several years. The devices, whether it’s a phone, computer, tablet, or watch, sync and work together. People become accustomed to iOS and develop a commitment to the ecosystem. Users may drift away from Apple eventually if it doesn’t figure out AI, but it’s unlikely that Apple’s user base would implode overnight.
Ultimately, Apple is a behemoth, a financial juggernaut with one of the world’s most influential brands. While Apple may not deliver the same type of returns as in years past at a $3 trillion market cap, the stock should have a relatively high floor, based on the company’s massive stock buybacks, growing dividend, and sticky business model. It’s worth the leap of faith that Apple will solve its AI frustrations.
3. Is AI an opportunity or a threat to Google?
Google’s parent company, Alphabet, is facing some pressure from several directions. AI models have become popular enough to begin siphoning traffic away from traditional search engines, like Google. At the same time, U.S. regulators have successfully pursued litigation against Alphabet for anti-competitive practices, which could result in fines or even forced divestitures that would potentially impact its core advertising business.
The adversity has one of the world’s most prominent technology stocks trading at a P/E ratio of just 19 today. Yet, AI is arguably more an opportunity than a threat. Alphabet has integrated AI summaries into its search results, successfully monetizing them. Despite all the worries about AI, Google’s ad revenue still grew by 10% in Q1 2025. Plus, Google Cloud is growing in size and profitability due to AI boosting demand for cloud services.
If that weren’t enough, Alphabet’s autonomous ride-hailing business, Waymo, is continuing to expand its footprint across the United States and could eventually become a significant piece of Alphabet’s business.
When you put it all together, it seems that this technology giant will continue to remain a prominent force across the AI and technology space. That’s an easy bet to make when the stock trades near its lowest valuation of the past decade.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Palantir Technologies. The Motley Fool has a disclosure policy.
3 Artificial Intelligence (AI) Stocks That Still Look Like Long-Term Winners was originally published by The Motley Fool