When I first saw the headline – OpenAI acquires Jony Ive’s startup in a $6.5 billion deal – my initial thought wasn’t about OpenAI. It was about Apple. And as expected, by midday Apple’s shares had slipped close to 2%, hovering around $202. That drop wasn’t just about money – it was about sentiment.
As a value investor, I don’t usually react to short-term market swings, but this one caught my attention. Not because of the price movement itself, but because of what was driving it: Jony Ive, the design legend who helped define Apple’s identity, is now officially building for someone else – and that someone else is a potential competitor. That shift carries more than symbolic weight; it challenges a key part of Apple’s moat: design leadership.
Let’s unpack the deal a bit. Ive’s AI hardware startup, io Products, had quietly been gathering talent – many of them former Apple designers like Evans Hankey and Tang Tan. Now OpenAI has not only bought the company but also brought in Ive and his team to spearhead a new class of AI-powered consumer devices. This isn’t just a talent hire – it’s a strategic pivot. It positions OpenAI to compete directly in a space Apple has dominated for years.
Market reaction was swift, and in my view, emotional. The concern is valid: if OpenAI builds a breakthrough AI device with Ive’s iconic design touch, could it actually threaten the iPhone or the broader Apple ecosystem? But the sell-off seems to overlook some fundamentals that, as a value investor, I find more important.
Apple is still one of the most cash-rich, efficient companies on earth. Even after a dip, it’s trading at a P/E ratio of about 32x, which isn’t outrageous considering its margins, brand strength, and ecosystem lock-in. Worries about Apple’s innovation aren’t exactly breaking news. We’ve been hearing since 2015 that Apple has “stopped innovating,” yet the company has continued to grow revenue, deepen services, and expand globally.
This situation exposes a deeper issue with how Apple is currently positioned in the market. Apple’s innovation story has lately felt more iterative than disruptive – especially in AI. Meanwhile, OpenAI is taking center stage with fast-moving, generative breakthroughs and now, potentially, physical products. Jony Ive joining that story adds emotional fuel to an already shifting market perception.
But here’s where I zoom out. As a value investor, I look for dislocations between price and intrinsic value, especially when they’re driven by sentiment or overreaction. In this case, the stock dropped 2% on the news, but nothing about Apple’s fundamentals changed overnight. Its customer loyalty, operating cash flow, global retail reach, and iOS ecosystem are intact. The brand power alone is worth billions, and no device – no matter how beautifully designed – is likely to displace the iPhone overnight.
That said, this deal is a signal. It tells me that Apple’s biggest threat may come from unexpected angles – not from Samsung or Google, but from companies like OpenAI who weren’t even in hardware two years ago. It also underscores the need for Apple to accelerate its AI narrative. Integrating ChatGPT into Siri and Apple tools was a good start, but they’ll need to go further, faster.
The real question now is whether this dip presents a buying opportunity.
From my point of view, yes – cautiously, yes. Apple’s fundamentals remain solid, and the market’s overreaction to narrative shifts often creates entry points for patient investors. This is a company with a $3 trillion market cap that still manages to grow earnings, repurchase shares aggressively, and maintain pricing power across its lineup. If the price falls closer to $190, I’d be even more interested, but at $203, it’s starting to get into that “buy and hold” territory again.
Of course, I don’t ignore the red flags. If Apple fails to articulate a compelling vision in AI by the end of 2025, or continues to lose top creative talent, that would begin to shift my long-term view. But for now, this feels more like a wake-up call than a death knell.
In fact, if anything, this could light the fire Apple needs to reassert its design and innovation dominance. History has shown that when Apple is underestimated – whether during the PC wars, post Steve Jobs, or during the rise of Android – it tends to surprise to the upside.
So yes, I’m watching closely. But from a value standpoint, I’m not selling Apple. I might even start nibbling again if the price dips further. In moments like these, I remind myself: the market often overreacts to headlines – but it eventually returns to fundamentals. Despite the current uncertainties, Apple continues to boast some of the most solid fundamentals in the industry.
Just a reminder: this is my personal take on the situation, not financial advice. Always do your own homework and talk to a financial professional before making any investment moves.