Dan Ives Is Betting That Apple and Google Will Partner in 2026. Should You Buy AAPL Stock First?

Core Viewpoint - A formal AI-oriented alliance between Apple and Alphabet is predicted to be announced in 2026, potentially increasing Apple's market capitalization to $5 trillion next year from its current level of slightly over $4 trillion [1]. Group 1: Market Capitalization and Financial Performance - Apple's market capitalization currently stands at approximately $4.04 trillion, with an income of $112 billion generated in the 12 months ending in September [3]. - AAPL's top line increased by 8% last quarter compared to the same period a year earlier, reaching $102.5 billion, and it has a trailing price-earnings ratio of 36.3 times [5]. Group 2: Stock Performance and Comparisons - AAPL stock has underperformed compared to many Big Tech peers, with only a 7% increase in the last 12 months and a 42% increase over the last two years, while GOOG has seen a 60% increase in the last year and approximately 121% over the last two years [4]. - One challenge for AAPL stock is the company's limited ability to generate significant revenue from the AI sector [4]. Group 3: Predictions and Realities - Dan Ives suggests that Apple's market capitalization could be boosted by nearly 25% through subscription fees for its AI offerings, but this prediction is viewed as unrealistic based on Microsoft's experience with its AI assistant, CoPilot, which generated about $400 million in direct revenue in 2024 [6].