Apple CEO Declares New Chapter in AI Play, Stock Dips 1.8%

On Thursday, Apple CEO Tim Cook heralded a new dawn at the Cupertino, California-based firm following this week’s launch of its suite of generative AI tools embedded in its flagship products.

“This is just the beginning of what we believe generative AI can do, and I couldn’t be more excited for what's to come,” Cook said during the call. Investors, however, were not convinced.

Apple stock fell 1.8% to $225.91 by the closing bell. The stock has since slumped a further 1.8% to $221.90 in after-hours trading, data from Google Finance shows. That came as results showed modest increases in company sales for the year.

Apple reported $94.9 billion in sales for the quarter, up 6% year-over-year, including $46.2 billion in iPhone sales. 

Company profits dropped 35.9% from the same time last year to $14.7 billion, mainly due to a $14 billion headwind in income back taxes in Ireland following a court ruling in September. 

Included in Monday’s iOS 18.1 update, Apple Intelligence allows users to summarize and rewrite text, search their photo library using descriptions of photos, and transcribe and summarize phone calls in real-time, among other features. 

Early reviews were lukewarm, with Wired calling the experience “flat” and the New York Times concluding that “the highly touted AI-transformed future still seems a long way off.” Axios said the product offered “only modest improvements.” 

On Thursday’s call, Cook noted additional features will be introduced in December, including ChatGPT integration and Visual Intelligence, which allows users to search for information directly from their camera app. It will also be given non-US English capabilities in December and foreign language capabilities in April.

Cook did not answer directly when asked whether Apple Intelligence had boosted iPhone sales since its launch earlier this week. However, he noted that iOS 18.1 was adopted twice as fast as iOS 17.1 during the same quarter last year. 

“We’re getting a lot of positive feedback from developers and customers,” he said. 

Several tech giants, including Google and Microsoft, have announced plans to incorporate AI models into their products this year as competition in the sector heats up. Both companies reported better-than-expected results earlier this week. 

Amazon also announced earnings this afternoon, beating analyst estimates. CEO Andy Jassy said credit was partly due to the company’s AI investments, noting that the company’s AI business is already growing by a “triple-digit, year-over-year percentage.”

Edited by Sebastian Sinclair