With Tim Cook stepping down after nearly 15 years leading the iPhone maker, investors are eager to see the new CEO's vision for the company.
- Tim Cook is stepping down after an iconic run as Apple's top executive.
- Apple shares surged almost 2,000% in Cook's 15 years as CEO.
- Wedbush analyst Dan Ives thinks incoming CEO Joh Ternus should prioritize AI and pursue M&A.
Apple shocked the market this week with news that CEO Tim Cook would step down, replaced by hardware chief John Ternus.
During Cook's nearly 15-year tenure leading the iPhone maker, the stock soared nearly 2,000%, handily outperforming both the S&P 500 and the Nasdaq. For tech analyst and longtime Apple bull, Dan Ives, the John Ternus era will need to focus on a few key areas to please investors.
"Tim Cook has created a global public persona, supply chain/logistics acumen that was unmatched, and a laser focus on the Services front which has been key to Apple's market cap hitting $4 trillion during the Cook tenure with the stock up 20x," Ives stated in a note to investors.
The analyst shared three things that he thinks Ternus should prioritize that could help Apple remain competitive as it navigates a rapidly changing industry.
Focus on AI
Apple has been criticized for not spending as much as scaling its AI endeavors as many of its peers. Now, the focus likely remains on hardware with the appointment of Ternus at a time when AI is top of mind for investors.
"We can't say it enough but Apple cannot watch the AI era from the sidelines as this 4th Industrial Revolution takes hold," he said. "In essence, Apple is a toll collector on the consumer AI highway and Ternus needs to finally get the AI strategy right and focus on monetization going forward."
Prioritize hardware and fresh innovation
Ives acknowledged that Ternus has a strong reputation as a hardware visionary, both at Apple and throughout Silicon Valley. He noted that the innovations that made Apple a legendary tech company seem to be coming back into focus with Ternus picked as chief exec.
"The software and Services monetization hinge on Apple's unrivaled installed base...but innovation going forward around foldable phones, an AI enabled smartphone, new sleeker/affordable Apple Glasses, and future hardware developments will be the hearts and lungs of Apple's success," Ives wrote.
Incorporate more outsiders and pursue M&A
Ternus may be a multi-decade Apple veteran, but Ives thinks the company needs to start bringing in more outsiders and acquiring more companies.
"We believe Ternus bringing in more innovation from the outside and changing course on the anti-M&A strategy at Apple will be important looking forward. In this AI World Apple has more cash, consumers, and brand recognition than any company in the world...but now is the time to flex the muscles and go on the offensive instead of the defensive," he noted.
Ives added, though, that this doesn't mean Apple should abandon the culture that defines it but rather find ways to keep it alive while bringing in fresh perspectives.