Apple's Silence on AI Glasses and Deals: Strategic Genius or Warning Sign for Investors?

Key Points

• Apple is playing it close to the vest with its AI glasses roadmap and acquisitions strategy.

• This relative silence shouldn't alarm investors.

• The company isn't likely to remain an AI underdog for too long.

• 10 stocks we like better than Apple ›

Is Apple (NASDAQ: AAPL) an underdog? That might seem like a silly question to ask about a company with a market cap of roughly $3.3 trillion and sales that will almost certainly top $400 billion this year. However, many investors view Apple as an underdog in a critical arena: artificial intelligence (AI).

Rumors have floated recently, though, that Apple could be investing heavily in developing AI glasses and is considering a major AI-related acquisition. The company could probably nip investors' concerns if it played up either story. However, Apple's executives remain largely silent on its AI glasses strategy and any acquisition plans. Is that strategic genius on management's part or a warning sign for investors?

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Playing it close to the vest in Cupertino

Citi analyst Atif Malik gave Apple CEO Tim Cook a great opportunity to comment on the company's AI glasses strategy during Apple's fiscal 2025 third-quarter earnings call on July 31. He first noted the momentum that Meta Platforms and Xiaomi are enjoying with their AI glasses. Malik then asked Cook if Apple was considering using the technology from its Vision Pro mixed-reality headset in other devices.

Did Cook hit the ball out of the park with his response? For many investors, it was more like a swing and a miss. He first praised the latest release of visionOS, the operating system for Vision Pro. All Cook would say about the future of Vision Pro, though, is that the company is still "very focused on it." He added, "I don't want to get into the roadmap on it, but this is an area that we really believe in."

Malik was also the only analyst on the call to bring up potential AI-related acquisitions. Addressing his question to Apple CFO Kevan Parekh, he asked, "Do you feel like you need to accelerate your AI roadmap or just keep the organic focus?"

Cook jumped in to reply instead of Parekh. He noted that Apple had acquired seven companies in 2025 already, although not all of them were related to AI. Anyone hoping for a hint that Apple was on the verge of a significant AI deal, however, was probably disappointed.

To be fair, Cook did state: "We're very open to M&A [mergers and acquisitions] that accelerates our roadmap. We are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature." But he quickly added that management didn't "have anything to share specifically today."

What should investors make of Apple's AI silence?

Is Apple really behind several other technology giants in the AI race? I think the answer is clearly "yes." The generative AI features in Apple Intelligence weren't as impressive as many investors expected. The delays in launching an update for Siri have also been embarrassing for the company.

However, I wouldn't say that Apple's silence on its development plans for AI glasses or the possibility of AI-related acquisitions is a warning sign. The company has historically said very little about products in development until they're nearly ready to roll out. And staying quiet on potential business development deals is prudent, especially if there's a possibility that another big player could enter the picture.

On the other hand, I wouldn't necessarily call Apple's approach a brilliant strategy. In particular, it wouldn't hurt to at least acknowledge that developing new AI devices, such as glasses, was on the product roadmap.

Cook and his team are almost certainly aware of what other tech CEOs are saying. For example, Meta's Mark Zuckerberg has unabashedly proclaimed that glasses are "the ideal form factor for AI." Sundar Pichai, who is CEO of both Google and its parent, Alphabet, said in his company's latest quarterly update that Google is "super excited about our investment in glasses" and referred to the devices as "an exciting new emerging category."

If Cook made similar comments, it wouldn't harm Apple's development plans. However, I suspect it would calm the nerves of some jittery investors.

Three predictions about Apple's AI future

What will Apple do regarding AI glasses and deals? I have three predictions.

First, the company will, as rumored, develop AI glasses. The first version of those glasses will be comparable to the Ray-Ban Meta AI glasses, in my view. But I expect Apple to integrate the AI glasses with iPhone along the lines of what it has done with Apple Watch. That would be a smart strategy because it could boost iPhone sales.

Second, I don't look for Apple to make a huge AI acquisition. Just because Cook said that Apple isn't "stuck on a certain size company" doesn't mean he's willing to spend too much. The most Apple has ever spent on a deal was $3 billion for the purchase of Beats. I predict that the company won't acquire Perplexity, for example, which was recently valued at around $18 billion and would likely cost a lot more for Apple to buy.

My third prediction is the one I'm most confident about: Apple won't be an AI underdog forever. The company's fortunes hinge too much on the technology.

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Citigroup is an advertising partner of Motley Fool Money. Keith Speights has positions in Alphabet, Apple, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool recommends Xiaomi. The Motley Fool has a disclosure policy.