Apple offered investors more reasons to like its stock after the company scrapped its decade-long self-driving electric car project, and CEO Tim Cook spoke about the iPhone maker's artificial intelligence vision. The tech giant announced the end of its self-driving electric vehicle endeavors internally on Tuesday, Bloomberg News reported, citing people familiar with the matter. Bloomberg said many employees on the nearly 2,000-person team will be assigned to work in Apple's artificial intelligence unit instead. At Apple's virtual shareholder meeting a day later, Cook said the tech giant sees “amazing breakthrough potential for generative AI, which is why we're currently investing heavily in this area.” Cook's comments are noteworthy because Apple's public embrace of buzzy technology has generally lagged behind its Big Tech counterparts since launching ChatGPT in late 2022 and pushing generative AI into the mainstream. Apple shares are down about 6% year to date, including a 0.75% decline on Wednesday. Meanwhile, the S&P 500 is up 6% in 2024. Despite the disparity, Jim Cramer repeated his old mantra about the stock. “The reason it's so hard to own Apple and not trade it is because you have periods of underperformance where everyone questions the wisdom of owning the stock,” Jim said during the Wednesday morning meeting. “The fact that they decided not to go with the car, well, thank goodness,” Jim added, citing the challenges and controversy facing existing efforts in autonomous vehicles, such as GM's Cruise and Club Holding's Waymo. the alphabet . Sales of electric cars with human drivers have also grown slower than expected, as the industry struggles to reach mainstream adoption despite huge investments in recent years from legacy automakers such as Club Holding Ford Motor and GM. The two companies have intensified their focus on hybrid cars. Overall, electric vehicles have become a saturated market, although Tesla remains the dominant player in the United States. There has been little public information about Apple's self-driving car ambitions, but reports first surfaced in 2014 when the company poached automotive engineers from other companies. The iPhone maker's path toward commercializing its electric vehicle ambitions is becoming increasingly unclear. The amount of resources allocated to these efforts – although small compared to Apple's overall business – could be used for more profitable projects. “I applaud that they change people [to AI]Jim said, though, that he's not convinced the pivot will have a material impact on Apple's standing in the heated generative AI race. However, it is a better use of resources than before. Apple declined CNBC's request for comment on the Bloomberg report. Apple's (AAPL) Year-to-Date Performance Some Wall Street analysts also welcomed Apple's decision to stop manufacturing cars, with Morgan Stanley analysts calling it a “positive development” that demonstrated welcome cost discipline and would eventually allow Apple to “repurpose assets Towards more significant initiatives” such as generative artificial intelligence. Meanwhile, UBS expects Apple to make formal AI announcements over the summer. An updated, AI-integrated version of Siri and Messages, along with a new processor for the iPhone 16, could make the analysts say: “We are particularly optimistic about innovative improvements like those of Apple’s flagship device.” “This will be really Next Engine of a Big Upgrade Cycle.” Wednesday. (Jim Cramer's Charitable Trust is long AAPL, F, and MS. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim takes a trade. Waiting Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after a trade alert is issued before executing the trade. The above investment club information is subject to our Terms and Conditions and Privacy Policy, In addition to our Disclaimer. No obligation or fiduciary duty is or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
A woman walks near an Apple Store in New York on December 26, 2023.
Eduardo Munoz | Reuters
apple Giving investors more reasons to like its shares after the company reportedly scrapped its decade-long self-driving electric car project, CEO Tim Cook spoke about the iPhone maker's artificial intelligence vision.
