Apple Inc. (AAPL) is finally making its move in the AI arms race, and it's doing so with a little help from its biggest rival. The company announced a multi-year partnership with Alphabet Inc.'s (GOOGL) Google that will bring Gemini AI models and cloud technology to Apple's ecosystem, including a much-needed upgrade to Siri.

Why Apple Needs Google's AI Muscle

Here's the setup: Apple has been watching from the sidelines while virtually everyone else in Big Tech has gone all-in on artificial intelligence. Since OpenAI's ChatGPT dropped in late 2022 and kicked off the AI boom, companies like Amazon, Meta, and Microsoft have been racing to integrate AI into everything they touch. Apple? Not so much.

Under the new partnership, Apple will rely on Google's Gemini models and cloud infrastructure to support its Apple Foundation Models, according to a statement obtained by CNBC's Jim Cramer. A joint announcement posted on X promised "a more personalized Siri coming this year."

Bloomberg had previously reported back in August that Apple was in early discussions with Google about using a customized Gemini model for a new version of Siri. Now it's official.

The timing is notable. Google's market capitalization actually surpassed Apple's last week for the first time since 2019, with Google briefly hitting a $4 trillion valuation. Meanwhile, Google has continued pushing forward with its AI strategy, rolling out its upgraded Gemini 3 model late last year.

What Analysts See Coming in 2026

Wedbush analyst Dan Ives laid out a bullish case for Apple in 2026, pointing to several catalysts that could lift the stock despite ongoing skepticism about Apple's place in the AI race.

The potential Google Gemini partnership sits at the top of Ives' list. He expects Gemini to become the exclusive partner for Apple's AI strategy, which makes sense when you consider the company's situation. Apple commands the largest consumer installed base on the planet with 2.4 billion iOS devices and 1.5 billion iPhones, but it lacks a clearly defined AI roadmap. A partnership-driven approach solves that problem.

Ives also expects Apple to roll out a revamped Siri in early 2026 as its answer to leading AI assistants from competitors. Beyond AI, he thinks iPhone unit sales in 2026 could beat current Street estimates, driven by strength in China and the expected launch of a foldable device during the iPhone 18 cycle.

As for speculation about CEO Tim Cook stepping down, Ives isn't buying it. He expects Cook to remain in place through at least the end of 2027, which he views as a critical period for Apple to design and execute its broader AI strategy.

Price Action: Alphabet shares were up 0.37% at $329.77 and Apple shares were up 0.39% at $260.37 at the time of publication on Monday.