Apple is at a point, where it concluded that if they cannot really outdo their competitors, they have no choice but to collaborate with them, and preferably a long term contract will do. The tech giant has reached a pact with Alphabet that lasts for several years, and as a result, Google’s Gemini models will be the heart of Apple’s next-generation foundation models.

This means that Apple Intelligence will now work with the assistance of Google’s AI strength for the development of a more intuitive and personalized Siri, but it’ll still run on private cloud compute and Apple devices. The question raised by the investors is if this alliance can really give Apple’s stock a significant boost in the year 2026 or not.

Apple’s AI Gets a Shortcut

Apple has not been one of the early adopters of AI technologies. The trio of Alphabet, Microsoft, and Amazon had already rearranged the AI landscape, while Apple was still figuring out whether to capitalize on the on-device, the cloud, or somewhere that would not provoke its privacy-first value. That strategy was although utterly commendable, but it caused the execution slowdown.

The features of Apple Intelligence came out quite late particularly in important markets like Greater China, and the assumed reversion of Siri kept being pushed back, just like a delayed iPhone shipment. The partnership with Google is Apple’s way of addressing time issues without compromising its core values. Apple benefits from Gemini’s cloud-based intelligence by getting faster and higher learning, while keeping the sensitive tasks close to home.

Why Google Gets the Better End of the Deal

Gemini is already integrated across Google Search and ads, which silently contributes to the increase of both engagement and the performance of the ads being demonstrated. Microsoft is riding Copilot’s popularity, Amazon is flexing AWS capabilities with Trainium 2, and now Google has the power to influence Apple Intelligence.

Validation of such high scale is not just validation, it is an absurd distribution. So this alliance closes the gap between Apple and the market. For Google, it positions Gemini as the central AI infrastructure in the ecosystems. Imagine Google lending its engine while Apple does the car, interior, and marketing campaign.

Apple’s Quiet Money Generating Machine

Apple’s Artificial Intelligence partnership will succeed the most in their Services segment. Approximately 26% of Apple’s total sales now come from Services and rely on a constantly growing device base as its driver. Apple Intelligence is predicted to help make applications smarter, ads more successful and users even more addicted to their screens, in a good and healthy way.

Such a story is already supported by numbers strongly. The total viewing hours of Apple TV+ went up 36% year over year in 2025, the App Store had more than 850 million global weekly users on average, and total developer earnings from 2008 stood at $550 billion. Apple Pay has been preventing merchants from losing money through fraud, and has also been responsible for over $100 billion worth of sales that wouldn’t have happened if it was not for the payment method.

If AI is at all of any help here, then Services could silently be made even more prominent on the balance sheet.

The Valuation Reality Check

Now comes the part that investors do not wish to listen to. The stock of Apple has not been so prominent as to attract great investors. Share prices increased only about 11% in a year, which is really bad considering the overall tech sector and companies like Alphabet and Microsoft are still a step ahead of Apple.

Also, the competition in China along with tariff uncertainties, and AI skepticism have made the company’s appeal a bit dim. The stock is at an unjustified price according to its Valuation. Apple maintains a high price-to-sales ratio when compared to the sector, and it also looks pricey in front of Amazon. A Value Score of F does mean a stressed valuation, even if the company remains a cash-generating miracle.

Earnings Estimates Gives Hope

At least there is a small ray of hope. The analysts have slightly raised Apple’s earnings estimate for the first quarter of fiscal 2026, which makes the new expectation $2.65 per share, and the revenues will increase by 10.42% as compared to the previous year. It’s not a spectacular growth, but it is a solid one.

Bottom Line

Is the partnership with Google going to drive Apple’s stock price higher in 2026? It has definitely added to Apple’s AI reputation and performance, mainly in the area of Services, which is characterized by high margins and strong customer loyalty. However, the agreement will not by itself re-rate the stock dramatically overnight.

Apple is still a top-notch company with a top-notch valuation. On one hand, for the long-term investor, the alliance makes Apple more intelligent and more competitive. On the other hand, for the short-term bullish investors, tolerance may still be required, as Siri could be getting clever, but the stock story will take longer to express itself clearly.