Apple Dumps Its EV to Secure AI Fortunes Instead

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As February came to a close, Apple (AAPL) shocked investors when it announced it was canning its decade-long, multi-billion-dollar effort to build an electric vehicle. And in so doing, the world’s second most valuable company confirmed the fortitude of the ever-growing AI Boom.

Here’s the scoop. 

Since 2014, Apple has been quietly working to build a next-gen electric vehicle. The secretive venture was dubbed “Project Titan.” And over the past decade, Apple has committed thousands of employees and billions of dollars toward it. It acquired self-driving startups, filed for driving permits and poached top talent from automakers like BMW (BMWYY). 

Apple went “all-in” on building an EV. 

Now it’s tapping out. 

Why? AI has replaced EVs as the trend of the decade. 

Behind Apple’s AI Pivot

At this point in time, we believe that Apple needs a “big win.” 

Sure, there’s nothing wrong with the firm, per se. It’s still a fabulous company, and iPhones are still dominating the mobile market. But at the end of the day, Apple is resting on its laurels. All of its present success still stems from its iPhone launch back in 2007.

But the iPhone’s financial benefits won’t last forever. Eventually, the product cycle will run its course. And those profits will dry up. 

That means that Apple needs another “hero product” to carry on its legacy after the iPhone becomes stale. 

A decade ago, Apple thought that hero product would come from the electric vehicle industry. At the time, EVs were in the very early stages of development and growing at a breakneck speed. And since then, the industry did soar to new heights. Today, more than 10% of cars on the road are electric vehicles. 

But that industry has now hit a brick wall. As consumer demand for EVs appears to be maxing out, EV sales are slowing dramatically. And subsequently, EV stocks are crashing. 

Apple no longer thinks that its next “hero product” can be an EV. 

Instead, it sees a future in AI.  

Finding the New AI Hero Product

As the EV industry has cooled off, the AI industry has caught fire. It’s the most dominant tech theme in the world right now. 

Yet, there still isn’t an AI hardware device that encapsulates this trend in the same way the iPhone encapsulated the internet trend. 

And now it seems Apple wants to build that device. It would be the firm’s next “hero product” – the long overdue follow-up to the iPhone. 

That’s why Apple is reportedly funneling most of its ‘Project Titan’ employees into its AI division.

It’s going all-in on AI. 

That’s quite a major signal.  

After all, it’s one thing to end a year-long project that required minimal resources. It’s an entirely different thing to shutter a decade-long project that required billions of dollars in investment

Apple wouldn’t be switching from EVs to AI if it wasn’t 100% sure that AI was the defining tech trend of the decade. 

The Final Word

We believe Apple is right.

AI is the defining tech trend of this decade. 

It’s not a fad. It’s a paradigm shift. 

Artificial intelligence is something that will continue to change the world over the next 10 years and beyond. And we believe it will continue to dominate Wall Street for the next decade, too. 

Like Apple, you need to shift gears and go “all-in” on AI. 

Learn about the best stocks to buy right now to join this revolution.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.

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