Apple Inc. (AAPL) shares gained nearly 4% on Wednesday after Bloomberg reported that the iPhone maker is preparing to launch its own AI-powered web search tool next year. The system, internally called World Knowledge Answers, will integrate into Siri and later expand to Safari and Spotlight. With this step, Apple aims to catch up in the AI space while competing directly with OpenAI and Perplexity AI.
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Apple Plans Big Siri Upgrade
Apple’s project is part of a long-delayed overhaul of Siri, which has had trouble handling complex queries. The new version will use large language models (LLMs) to give better answers with text, photos, videos, and local info. Apple calls it an “answer engine” — a tool designed to make Siri a true alternative to ChatGPT or Google’s (GOOGL) AI search.
To build this, Apple has struck a deal with Alphabet to test a Google Gemini model inside Siri. The company is still weighing other AI options, such as Anthropic’s Claude, though Google has reportedly offered more favorable terms.
Market Cheers the Move
The news lifted Apple stock to $238.47, its best one-day gain in nearly a month. Investors see the AI push as a way to spark growth beyond iPhone sales.
At the same time, a U.S. judge ruled that Apple can maintain its deal to keep Google as the default search engine on its devices, with only minor changes. The agreement generates roughly $20 billion a year for Apple, and investors were relieved to see it continue.
Still, Apple’s decision to pursue its AI search tool shows its plan to reduce reliance on Google and capture more share in the growing generative AI market.
Can Apple Catch Up?
Apple has trailed rivals like Microsoft (MSFT) and Google in AI. But the new Siri, with AI-powered search and a new design, could help close that gap to some extent. If the rollout goes well, Apple may become a key player in the fast-growing “answer engine” market.
For now, investors seem upbeat. The Siri revamp, plus steady income from the Google deal, may boost both Apple’s AI plans and its stock path into 2025.
Is AAPL a Good Stock to Buy?
On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 16 Buys, 11 Holds, and one Sell rating. The average Apple price target of $239.36 implies 0.37% upside potential from current levels. Year-to-date, AAPL stock has lost nearly 4.4%.
