2025-12-09 14:37:33
Apple’s slow AI strategy is seemingly paying off as investors grow weary of Big Tech’s massive AI spending spree.
For much of early 2025, Apple was hammered for lagging behind rivals on artificial intelligence, with Wall Street frustrated by the absence of an ambitious roadmap.
Its stock sank 18 per cent through June, making it one of the weakest performers in the Magnificent Seven.
But as scrutiny intensifies over the sustainability of AI-driven capital expenditure – and as Meta, Microsoft and even Nvidia stumble – Apple has emerged as an unlikely haven.
Since July, Apple shares have surged 35 per cent, outpacing the S+P 500 and Nasdaq 100 and vaulting the company to a $4.1 trillion valuation.
That leap has pushed Apple past Microsoft in the index weightings and put it within reach of Nvidia.
Investors now see the company’s restraint as discipline rather than deficiency.
Portfolio managers say Apple’s refusal to join the AI “arms race” – which has seen competitors commit hundreds of billions to data centers and chips – has helped preserve margins and avoid the backlash forming around ballooning AI budgets.
Apple, they argue, is well-positioned to benefit later, once AI is stable, mainstream and integrated naturally across its devices and services.
The rally comes with a caveat, as Apple is now expensive.
Shares trade at roughly 33 times forward earnings, far above their long-term average and second only to Tesla in the Magnificent Seven.
Analysts warn that investors may be overpaying for Apple’s perceived defensiveness, and technical indicators suggest the stock may be due for a pullback in early 2026.
Still, the prevailing sentiment is clear – as doubts grow about an AI bubble, Apple’s measured approach, and its dominant global consumer ecosystem, has made it the market’s preferred safe harbor.
Visit Bang Premier (main website)
