Does Apple need an AI acquisition? Here's what you need to know

Market Performance & Valuation - Apple is on pace for its best week since December 2021, driven by various factors [1] - A target price increase to $260 from $240 is suggested by Melius Research, reiterating a "buy" rating [1] - Year-to-date, the stock is down 9.2%, while up 6.8% over one year, compared to the S&P's 21% increase [8] - The stock's forward earnings multiple is high relative to its growth rate, requiring boosted growth to maintain the multiple [3] Strategic Imperatives & AI - Apple needs to consider acquiring Perplexity, bringing in outside talent, and partnering with Google Gemini to address valuation concerns [2] - An AI acquisition is deemed necessary for Apple, with Perplexity suggested as a viable option [5][12] - Services revenue reached an all-time high of $27.4 billion without AI, indicating potential for further growth with AI integration [12] External Factors & Geopolitics - Tim Cook's White House visit and pledge of greater US investment may have positively impacted the stock [1][4] - Reduced punitive impact from India tariffs compared to other companies could be beneficial [1][4] - China's market performance is improving for Apple [10] Financial Health & Growth - Revenue has increased by $100 billion, and net income has essentially doubled over the past few years [9] - Net income growth has been relatively flat in the last three years, with a 11.1% annualized growth over five years, highlighting the need for new growth drivers beyond increased unit sales [11]