"Shares of Apple Inc. were battered earlier this year as the iPhone maker faced repeated complaints about its lack of an artificial intelligence strategy. But as the AI trade faces increasing scrutiny, that hesitance has gone from a weakness to a strength and it's showing up in the stock market. Through the first six months of 2025, Apple was the second-worst performer among the Magnificent Seven tech giants, as its shares tumbled 18% through the end of June. That has reversed since then, with the stock soaring 35%, while AI darlings like Meta Platforms Inc. and Microsoft Corp. slid into the red and even Nvidia Corp. underperformed."
"The shift reflects the market's questioning of the hundreds of billions of dollars Big Tech firms are throwing at AI development, as well as Apple's positioning to eventually benefit when the technology is ready for mass use. While they most certainly will incorporate more AI into the phones over time, Apple has avoided the AI arms race and the massive capex that accompanies it, said Bill Stone, chief investment officer at Glenview Trust Company, who owns the stock and views it as a bit of an anti-AI holding."
Apple's stock fell early in 2025 amid criticism over a perceived lack of an AI strategy but reversed sharply after June, rallying 35% and boosting market value to $4.1 trillion. The rally outpaced some AI-focused peers, as investors questioned heavy AI spending across Big Tech and favored Apple’s conservative capital allocation. Portfolio managers view Apple as positioned to adopt AI when it is ready for mass use while avoiding the expensive AI arms race today. The stock now trades near 33 times expected earnings, a valuation level seen only a few times in the past 15 years.
Read at www.mercurynews.com
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