Could Apple's Gemini deal be the catalyst the stock needs?

By Christine Ji

The iPhone maker reportedly sealed a long-rumored partnership with Google Gemini, sparking hope that Apple is taking AI more seriously

Apple has struggled with AI innovation, but the company reportedly has a high-profile new AI partnership.

Google's Gemini chatbot catapulted Alphabet's stock last year. Will it now do the same for Apple's?

In a development that could help its reputation as an artificial-intelligence laggard, Apple reportedly confirmed Monday that it is partnering with Alphabet's Google to use Gemini for the next generation of its Siri virtual assistant, which is set to launch later this year.

On Monday morning, CNBC reported that Apple will utilize Google Gemini to power Apple Foundation Models going forward. Shares of Apple (AAPL) rose 0.3% on the news, while Alphabet (GOOG) (GOOGL) gained 1%.

"This is what [Wall] Street has been waiting for," Wedbush's Dan Ives wrote of the Gemini agreement on Monday. He believes the deal was "a necessary move" to improve Siri and tap into new revenue streams.

Just yesterday, Ives had identified a Gemini partnership and a revamped AI Siri as two top goals for Apple in 2026. He anticipates that an AI-driven subscription service will be launched to Apple's massive customer base this summer.

See more: Apple's stock can climb 35% this year - if these four scenarios play out

A potential Apple-Gemini deal had been highly speculated about for months, with Bloomberg reporting early discussions last August. And according to a November Bloomberg report, the partnership would involve a 1.2-trillion-parameter AI model that would run on Apple's own servers, separate from Google's infrastructure. The partnership would cost around $1 billion annually for Apple.

Apple did not immediately respond to a MarketWatch request for comment.

Investors have been displeased with the iPhone maker's slow progress in the AI space and its lackluster Apple Intelligence offering. In contrast, Apple's peers in the "Magnificent Seven" group of tech stocks have invested far more in things like frontier models.

However, Evercore ISI analyst Amit Daryanani wrote in a note last week that Apple could flip the script on AI this year, a claim potentially validated by the Gemini partnership. Daryanani anticipated a new Apple Intelligence strategy powered by Gemini that runs across three tiers: on-device, on Apple's Private Cloud Compute and on an external large language model.

Apple's stock has risen 10% over the past 12 months, while the S&P 500's SPX gains have been roughly double during that span.

Read on: Apple's stock falls for the eighth straight day. Here's what investors might be missing.

-Christine Ji

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