Gene Munster, managing partner at Deepwater Asset Management, joins 'The Exchange' to discuss GPT-5 as a key catalyst for big tech, why Apple’s AI potential is still misunderstood, and more.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Gene Munster, managing partner at Deepwater Asset Management, stated that Apple is not getting sufficient credit for its work in artificial intelligence. He highlighted that while concerns about tariffs have recently eased for Apple, investor uncertainty remains around the company's AI strategy.

Munster acknowledged that Apple has been slower than competitors in releasing AI-driven products, but argued that this approach is justified as no major competitor has yet introduced a transformative AI device. He believes Apple's integration of advanced AI models, such as those from OpenAI, into products like Siri will demonstrate the company's strength in combining hardware and software, and that upcoming product updates could shift investor perceptions.

Apple not getting credit for what they’re doing in AI: Gene Munster

Joining me now is Deepwater Asset Management's Gene Munster. Gene, great to see you. We kind of are hiding the lead here in terms of what big tech stock in particular you think GPT-5 is going to make a difference for. Do the big reveal. It's Apple, Eamon, and the reason is that ultimately that the company's just not getting the credit for what they're doing in AI. And I want to take a quick step back here when we look at the context of what Sam is announcing today versus what it means to Apple and Apple shareholders more importantly, is that Apple stock has had two concerns this year. Of course, it's tariffs and that resolution has caused the stock to go up 13% of the past few days. NASDAQ's up a couple percent during that time. But this AI question, this unanswered AI question is still nagging investors. And I think that it just grossly misses the point when you think about where their products can ultimately go and something unique that only Apple can do, which is this hardware and software services, that piece. It's not just rhetoric. That's something that at scale, there's no other company out there that's doing this. And so when we take the update related to GPT-5 and some of their new models from open AI and consider that Apple is building their next very critical product, which of course is Siri, based on this, it just means that it's going to have an injection. If I would just kind of put this at the most basic level, what Sam Allman said today, that things are crazy. What crazy means is that it's crazy good, that the engagement is there. And Apple's ability to harness that in their unique product strategy at a high product quality level, I think is grossly underestimated. And so I'm just going to fast forward to the end here is that next spring, probably at WWDC, we're going to see a new Siri and it's going to be powered by probably like a GPT-6. But that I think ultimately will comfortably clear the bar and show to investors that Apple in fact is real when it comes to AI. And I think that the news today is supportive of that. Yeah, I mean, we don't know exactly what Sam Allman meant by crazy numbers. I mean, I don't know what sort of quantifiable metric that points to exactly, but I wonder if the, you know, sort of the opposite case here is that that points to how far behind Apple might be. I mean, critics of Apple have said they've been slow on AI. They haven't put out products that can match some of the things that we've seen people jumping onto. And that means they're losing market share, losing mind share, all those things that are so important in a tech environment where things can change so quickly. So absent an acquisition, Apple's not in the model business and so they're going to partner. And I've had concerns about that in the past, like their future of AI really isn't in their control. But the more I've thought about it, I think it's okay if they partner. And so I think to compare the craziness that's going on with this next GPT model to where Apple's at is kind of disconnected. I want to focus in on one word that you said. It's the right word, which is slow. They've been slow. And that is true. Apple's been slow. I've covered and invested in this company for a long time. I've never seen a move quite as slow, even from respect to past times, and they've been late to come to a market, but they're going slow. But that's okay. And the biggest reason why it's okay is because competitively, nothing has happened when it comes to AI and devices. There's no killer new AI device that's competitively changing that. And so Apple has time to stick to this incredibly high product bar, this quality bar, that 1.4 or 5 billion people use every day. And so I think that what's most important is just look at the arc here, that the models are getting smarter and Apple's still in a unique position to leverage those.

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Apple not getting credit for what they’re doing in AI: Gene Munster

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Rise of AI