Apple has spent much of the AI era on the sidelines, watching as Microsoft, Google, and a parade of startups captured the technology's transformative potential. Now, with a landmark partnership to integrate Google's Gemini AI into its products, the iPhone maker is finally making its bid to join the artificial intelligence race. Analysts say the move could fundamentally reshape Apple's competitive position—and potentially add tens of billions of dollars to its market value.

The Partnership: Gemini Comes to Apple

Under the multi-year agreement announced earlier this month, Google's Gemini AI models will power next-generation versions of Siri and Apple Intelligence features across iPhone, iPad, and Mac. The partnership represents Apple's acknowledgment that developing cutting-edge AI capabilities entirely in-house would require years of catch-up effort—time the company may not have given the pace of competitor innovation.

For Google, the deal provides access to Apple's billion-device installed base, creating what could become the largest deployment of Gemini technology anywhere in the world. The financial terms have not been disclosed, but industry observers estimate Google will receive billions of dollars annually in licensing fees—echoing the structure of the companies' existing search agreement.

"This partnership positions Apple to leapfrog years of internal AI development while giving Google unprecedented reach into the Apple ecosystem."

— Technology industry analyst

Why Apple Fell Behind

Apple's AI lag has multiple causes. The company's emphasis on privacy has complicated the deployment of cloud-based AI models that competitors have embraced. Its organizational structure, which prioritizes product-focused teams over research labs, has left it without the kind of dedicated AI research organization that has driven breakthroughs at Google, Meta, and OpenAI.

The departure of key executives has compounded the challenge. Apple's AI chief retired in late 2025, joining a wave of high-profile exits that included the company's COO, head of government affairs, and general counsel. Meanwhile, the company's design vice president departed for Meta, raising questions about Apple's ability to integrate AI capabilities into compelling consumer products.

The Stock's AI Penalty

Investors have noticed the gap. Apple shares have slid approximately 5% since the start of 2026, underperforming the broader market as AI-focused competitors surge. The stock's trading multiple has compressed relative to peers, reflecting skepticism that Apple can catch up in what many view as the defining technology of the decade.

Alphabet, by contrast, has seen its stock hit new highs following the Apple partnership announcement, with analysts at Bank of America and JPMorgan raising price targets on expectations that Gemini deployment across Apple devices will accelerate AI monetization.

The Siri Overhaul: Spring 2026

Apple's biggest AI-related initiative will arrive this spring with a comprehensive overhaul of Siri, the voice assistant that has fallen behind competitors since its 2011 debut. The updated assistant is expected to be more conversational and capable of completing multi-step tasks—capabilities that current Siri conspicuously lacks.

The Gemini partnership is central to this upgrade. Rather than relying solely on Apple's in-house AI models, the new Siri will leverage Google's language capabilities for complex queries while using Apple's on-device processing for privacy-sensitive tasks. The hybrid approach aims to deliver competitive AI features while preserving Apple's privacy positioning.

The $100-Per-Share Opportunity

Analysts at Evercore ISI have raised their Apple price target, citing what they describe as a "sizable catalyst" from upcoming AI innovations. The firm estimates that successful AI monetization could add up to $100 per share to Apple's valuation over the coming years—a roughly 40% uplift from current levels.

The bull case rests on Apple's unique ability to integrate AI capabilities across hardware, software, and services. Unlike competitors who offer AI through standalone applications, Apple can embed intelligence throughout the user experience—from email composition to photo organization to health monitoring. If executed well, this integration could create switching costs that reinforce Apple's ecosystem advantages.

The Risks: Execution and Dependence

The Gemini partnership is not without risks. By relying on Google for core AI capabilities, Apple creates a strategic dependency on a company that is also a competitor in smartphones, tablets, and wearables. If the partnership sours—or if Google gains leverage through Apple's dependence—the arrangement could prove costly.

Execution risk looms large as well. Apple has struggled with AI product launches in the past, most notably the delayed and underwhelming Siri improvements promised in 2024 and 2025. If the spring 2026 overhaul disappoints, it could reinforce the narrative that Apple has lost its innovation edge.

The Competitive Response

Competitors are not standing still. Microsoft continues to deepen its partnership with OpenAI, integrating GPT-4 capabilities across Windows, Office, and Azure. Google is expanding Gemini's capabilities with each model generation. Meta has open-sourced its Llama models, creating an ecosystem of AI applications that could challenge Apple's approach.

Amazon, meanwhile, has upgraded Alexa with generative AI capabilities that narrow the gap with Siri—and the company's deep integration with smart home devices gives it advantages in the emerging ambient computing space.

What Investors Should Watch

For Apple shareholders, several milestones will determine whether the AI pivot succeeds:

  • Spring Siri launch: The reception to the new Siri will signal whether Apple can deliver competitive AI experiences
  • iPhone 17 cycle: Demand for the next iPhone generation will reveal whether AI features drive upgrades
  • Services revenue: AI monetization should eventually appear in Services segment growth, Apple's highest-margin business
  • Developer adoption: Third-party integration of Apple Intelligence features will indicate ecosystem health

Apple's patient approach to AI has left it playing catch-up, but the company retains formidable advantages: an unmatched installed base, deep integration between hardware and software, and a brand reputation for products that "just work." Whether those assets can overcome a three-year head start by competitors will determine Apple's trajectory for the rest of the decade.