Apple (AAPL) shares jumped 2% on Monday but the stock is still off 18% so far in 2025 as of yesterday’s closing price. While the benchmark S&P 500 (SPX) and Nasdaq-100 (NDX) are sitting at record highs, Apple stock is down 21% from its all-time highs from December and remains in Bear-Market territory. The rally on Monday came after a Bloomberg article said the iPhone-maker is weighing using AI technology from Anthropic or Microsoft-backed (MSFT) OpenAI to power a new version of its Siri voice assistant. The tech giant has spoken with both companies about using their large language models for Siri, asking them to train versions of their models that could run on the iPhone maker's cloud infrastructure for testing, the author says, citing people familiar with the discussions. The news comes after last week’s speculation from articles suggesting that Apple (AAPL) is looking to buy, or partner with, Perplexity AI.

Nothing is confirmed but is reflective of how Apple has prioritized user privacy and on device Ai processing but is now trying to catch up with LLMs in the Artificial Intelligence race. Apple is historically conservative in its approach to M&A activity and prefers to buy back their own stock in shareholder friendly actions. The Company has promised enhanced AI features since its World-Wide Developers Conference in June of 2024, but the rollout has been slow and delays to its Siri update until 2026 has been weighing on the stock. At the heart of Apple’s challenges is Siri, its voice assistant, which has lagged behind competitors like Amazon’s Alexa and Google’s Assistant for years.

But maybe this is what Apple needs at this point because they are falling further behind the AI race. With a massive user base, Apple would be an ideal candidate to partner with a company like Anthropic or Open AI. The costs to build out Large Language Models (LLM’s) is significant as seen by the major investments from other Mag 7 and tech companies, which could save the company millions of dollars. Apple’s prior partnership with OpenAI, announced in June 2024, involved no direct payments, with Apple leveraging its massive device ecosystem as compensation, a strategy that may not scale for a full Siri overhaul. Anthropic, backed by Amazon (AMZN), may seek a multibillion-dollar annual fee that goes higher as use increases. Meanwhile, OpenAI, which already powers some Siri features like world knowledge queries and text generation, may have more favorable terms. And don’t forget about Alphabet (GOOGL), as Apple already has a partnership with Google search that nets the company about $20 Billion a year.

Investors liked the news of a potential partnership deal with the stock up over 2% yesterday. Maybe this is the catalyst that investors need to get the stock to play catch-up with the overall market. The stock finally broke through its 50-Day Simple Moving average of $202.84 on Monday, which had been a resistance area throughout June.  The company reports earnings on July 31^st with expectations relatively muted due to flat growth over the last couple of years. Apple may see a bump in iPhone sales last quarter as purchases ramped up due to impending tariffs that saw consumers buy ahead of any potential price increases. Investors should watch headlines from the company on any potential AI partnership, which may provide some support to the stock but at what cost?

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