- Apple's recently announced initiative to develop home robots could be a setback for the company, Wedbush's Dan Ives said.
- He says leaning into artificial intelligence should by the company's priority.
Apple's recently announced foray into developing home robots could end up being a "horror show" for the company, according to Wedbush analyst Dan Ives.
Speaking to CNBC this week, Ives referenced a Bloomberg report that Apple is exploring the creation of home robots, with an eye on that becoming the tech giant's "next big thing." The news came not long after the iPhone-maker dashed plans to roll out a self-driving car, a decade-long project known as Project Titan.
Ives thinks such a shift would be detrimental to Apple, which should instead be primarily focused on leaning into artificial intelligence.
"It would be a horror if they actually spent money on robots. Look at the failed EV initiative, Project Titan," Ives said. "For Cook, his legacy is going to be AI. If they went after robots, that would be a black eye moment for Apple."
Other strategists on Wall Street have also sounded doubts over Apple's robot development. Gene Munster, who has been bullish on the iPhone maker for years, noted that the company has shelved plenty of projects over the years before ever rolling them out to the public.
"I 100% agree it makes sense for Apple to have a small skunkworks project exploring a deeper dive into home automation. That said, I put the probability that we see a product in the next five years at slim to none," Munster said in a post on X.
Apple has faced a number of negative headwinds and headlines over the last year, stemming from restrictions in China, an anti-trust lawsuit from the Department of Justice, and recent layoffs. Shares of its stock have slid 12% from levels at the start of 2024.
Even amid his concern around Apple's home robots, Ives remains bullish on the company's stock trajectory over the medium-term. In Wedbush's latest note on Apple, the firm maintained its "outperform" rating on the stock and 12-month price target of $250, implying shares will rise 47%. But that projection hinges on Apple continuing to put its AI at the forefront of its priorities, the analysts suggested.
"We have seen Apple's back against the wall before and we view this period as just another chapter in the Apple growth story with AI now on the doorstep of coming to Cupertino," the note said.