Apple Has 1 Shot To Nail 'Paradigm Shift' Opportunity, Change The Way We Engage With AI, Gene Munster Says: 'If They Miss This They're In Trouble'

Apple Inc APPL is working on an overhaul of one of its products that could completely change the way a lot of the world engages with artificial intelligence, according to Deepwater Asset Management's Gene Munster.

The analyst anticipates a successful rollout could help cement the company’s place as one of the leaders of the Magnificent Seven.

What To Know: Tuesday on CNBC’s “Squawk Box,” Munster said the reason he did not throw in the towel on Apple when most were writing it off due to its trailing position in the AI race is because of its installed base of more than 2.2 billion active devices.

“That is the way that 20% of the world is going to experience AI,” Munster said on the show.

The Deepwater analyst believes Apple’s virtual digital assistant “Siri,” which launched in 2011, is the key player in the AI race for Apple. Munster noted that he expects the company to take a “huge step forward” with Siri with the help of an AI partnership, most likely with OpenAI.

Sometime in 2025, he expects Apple to roll out a new chip architecture featuring a GPU for smartphones that can be used to run small language models, he said.

Although AI is one of the hottest topics of the year, the majority of people have not actually used it, Munster said, adding that he expects a lot of people to get their first taste of what AI can do on an iPhone.

“Very similar to what Apple has done in terms of the paradigm shift from the mouse to the touch interface, the AI interface and AI embedded in the operating system is going to be a vault forward,” Munster said.

Related Link: As Nvidia Closes In On Apple’s Market Cap, Munster Explains Why Cupertino Could Generate Better Returns Over Next Year

Apple’s Worldwide Developers Conference is set to kick off on June 10. Munster thinks a revamped Siri product is likely to be one of the “shiniest” announcements out of the conference. The analyst cautioned investors about trading the event, warning that typically Apple stock gets bought heading into events and sold on the actual news.

“Keep in mind that when it comes to Siri, all of Apple’s devices, with the exception of AirPods, have the ability to summon Siri … We talk about different forms of wearing and having AI close to us. Siri is probably going to be the best way that’s going to be embodied,” Munster said.

“They better nail that piece related to better conversation with Siri. People are going to give it one more try. If they miss this, they’re in trouble, but if they nail it, I think the view of Siri is going to change materially.”

AAPL Price Action: Apple shares were up 0.57% at $195.14 at the time of publication Tuesday, according to Benzinga Pro.

Read Next: Apple GPT, AI-Siri, VisionPro’s Global Rollout: What To Expect At WWDC 2024

Photo: Courtesy of Apple.