Apple (NASDAQ:AAPL) stock has been all over the place lately after the tech giant revealed it will cancel its long-rumored Apple car project. It had working on the project for an estimated 10 years. Indeed, in its stead, the iPhone maker plans to redirect its attention towards generative artificial intelligence (AI) and its virtual reality/augmented reality product line.
The news marks the conclusion of Apple’s tight-lipped electric vehicle (EV) program, which employed thousands of employees. The vehicle was always a point of both confusion and allure for Apple fans. While the idea of an EV was out of left field compared to Apple’s current product lineup of laptops, cellphones, tablets, smartwatches and recently, VR/AR headsets, many were interested to see just how innovative an Apple car could be, given the current saturated state of the EV market. Apparently, the tech giant was especially focused on the vehicle’s self-driving features.
Reports of the Apple car first appeared in 2014, after the company began hiring automotive engineers and similarly auto-related employees. Since then, Apple has been tight-lipped on the project, never overtly mentioning it in any public forum, which, in fairness, is something of a reoccurring theme for new Apple product launches. That said, when asked about the project publicly in 2016, Apple Chief Executive Tim Cook said: “It’s going to be Christmas Eve for a long time.”
Apple is perhaps best known in the auto world for its CarPlay audio software, which Apple claims is installed in 80% of new vehicles.
AAPL Stock Stagnates on Scrapped Apple Car Project
AAPL stock actually climbed almost 1% Tuesday, following the news of the Apple car project’s demise. Unfortunately, it appears not investors feel the same about the end of the automobile, as AAPL is now down about 0.6% heading into the afternoon today.
Reasonably so, after 10 years and, presumably, millions of dollars in R&D costs, it makes sense that some investors are a bit disappointed that they’ll likely never see an Apple-badged EV rolling down the street.
That said, Apple’s new focus is catching up to the likes of OpenAI and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) in the genAI space, as well as on its still nascent Vision Pro headset.
Analysts everywhere have been in a virtual frenzy over the revenue potential of AI for more than the past year. This has led Nvidia (NASDAQ:NVDA) to inch dangerously close to the iPhone maker in terms of market capitalization, largely off the back of its AI-optimized graphics cards.
Meanwhile, EVs have become something of yesterday’s news. With numerous once high-profile EV makers having sunk into obscurity. And even the likes of Tesla (NASDAQ:TSLA) suffering sales-related stock losses. The industry is clearly not quite as glowing with potential as in past years.
While it’s unclear where exactly AI will take Steve Jobs’ brainchild, investors are tentatively excited about the pivot.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
