Investor Peter Andersen is disappointed in Apple’s ‘embarrassing absence’ in AI ahead of iPhone event
Apple is expected to unveil the new iPhone 17 at its Sept. 9 launch event , but investor Peter Andersen is far from excited to see the company’s latest lineup of releases. Andersen, the founder and chief investment officer of Andersen Capital Management, joined CNBC’s ” Power Lunch ” on Monday to offer his take on the iPhone maker, as well as a few other market movers. Here’s what Andersen had to say during the “Power Check” segment. Apple Apple shares traded 1% lower on Monday ahead of its Tuesday launch event, which takes place at its campus at 10 a.m. pacific time. The tagline on the event is: “Awe dropping.” But Andersen was far from wowed, instead expressing his disappointment in the tech titan for its products and positioning — specifically, its lack of focus on developing its software capabilities and catching up to peers on the artificial intelligence front. Instead, the investor said that Tuesday’s update, which is expected to be more targeted towards hardware development, “seems to me kind of a head fake and ignoring the elephant in the room.” “Siri’s results have been awful, and Apple intelligence development has really been lacking. So it’s quite an embarrassment, in terms of AI efforts, but they’re trying to re-shift that focus onto their hardware development,” he said. “If you’re really a critic of Apple, you could argue has there been any innovation other than these incremental developments? Some people jest about, well, they’re adding five lenses now, as opposed to four lenses on their camera.” While the company’s new hardware releases could assuage investors in the short term, this is not nearly enough to prop up the company’s fundamental valuation over a longer horizon, Andersen added. “They will attempt to focus the fact of new penetration and that the hardware offers new innovations, but in the long run, I do really think they have to focus on the software development. Now one solution, of course, is you can buy a new iPhone and just download ChatGPT on it if you want, and that’s an end-around for their embarrassing absence in AI development,” he said. “But I don’t think that that’s a long-term solution.” Oracle Tech old guard Oracle , up 3% on Monday, was another stock Andersen had an eye on. The company is set to report its fiscal first-quarter results after Tuesday’s closing bell. But Andersen said that he was wary on the stock after reports from investors that the corporate adoption rate of artificial intelligence may be slowing down. The investor approximated that around 80% of Oracle’s revenues are derived from its AI cloud infrastructure business. “That is a major factor in all this, especially with Oracle’s earnings,” he said. “So if there is a slowdown in AI [adoption], then we will definitely see some narrative from the company about maybe the spending rate will not continue at this ferocious pace that it has been year to date.” What’s more, Anderson added that any negative connotation from Oracle on this front could act as the canary in the coal mine for other companies seen as the poster children for AI development. “At this point, if the company even vaguely hints that there is a slight slowdown, that can be enough, in my opinion, to cause quite a panic sell in any of the companies that are related to AI development,” he continued. Robinhood, AppLovin Finally, Andersen said that the S & P 500’s newest additions of Robinhood and AppLovin could be indicative of the focus in investing going forward. Stock trading app Robinhood and ad tech stock AppLovin will join the benchmark before trading begins on Sept. 22. Shares of Robinhood surged 16% on Monday, while AppLovin jumped 12%. “As the S & P looks to add new membership, certainly they want to stay relevant to today’s investor,” Andersen said. “And so these two companies are probably extremely relevant to some of the investors out there that are focusing on crypto.” But if his thesis of AI spending slowing down comes to fruition, the S & P could go in another direction with future additions, he continued. “I would expect if there is a slowdown in AI spending, then there also will be a shift of focus. I mean, I think it would be nice to just have a regular manufacturing company added to the S & P 500, but I think we’ll have to wait to see if that will actually happen over the year,” Andersen said.
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