Recently, Evercore ISI reiterated its positive outlook on Apple Inc. (NASDAQ:AAPL), maintaining an Outperform rating and a $220.00 price target for the company’s shares. This decision comes on the heels of Apple’s announcement regarding its collaboration with Baidu (NASDAQ:BIDU) to integrate the latter’s artificial intelligence platform, Ernie, into its Chinese operations.
The partnership between Apple and Baidu holds immense strategic benefits for both companies. By leveraging Baidu’s AI technology, Apple can enhance its operations in China without incurring exorbitant costs typically associated with developing such technologies in-house. This collaboration also enables Apple to refine its internal large language models (LLMs) at a steady pace, without the need to invest heavily in securing high volumes of GPUs.
One significant aspect of this partnership is the potential favor it may attract from the Chinese government. Given China’s push to become a global leader in AI innovation, Apple’s tie-up with Baidu could help bolster the government’s initiatives in this space. Moreover, this move may help improve Apple’s relationship with Chinese authorities, especially at a time when concerns about the company’s supply chain independence from China have been raised.
The recent collaboration with Baidu, along with CEO Tim Cook’s visit to Beijing for the opening of a new store, signals Apple’s commitment to strengthening its presence in the Chinese market. By demonstrating a willingness to work with local partners and aligning with government priorities, Apple is taking proactive steps to solidify its goodwill and market position in China.
Evercore ISI’s endorsement of Apple’s strategic approach to AI, supply chain diversification, and relationship-building in China highlights the company’s forward-thinking strategies. The partnership with Baidu is a testament to Apple’s commitment to leveraging external expertise while navigating complex market dynamics. As Apple continues to expand its presence in China and pursue technological advancements, this collaboration could prove to be a game-changer in furthering the company’s growth and competitiveness in the region.