Apple’s conservative approach to artificial intelligence spending, previously criticised by Wall Street, is now being viewed favourably by investors. Unlike its Big Tech rivals who are aggressively investing in AI, Apple’s more cautious strategy is proving to be a boon as investor scrutiny of AI spending increases, leading to volatility for companies like OpenAI, Meta Platforms and Microsoft.
Brian Mulberry from Zacks Investment Management suggests that Apple benefits from being seen as a technology company that doesn’t have to justify massive AI investments. The company can leverage AI models developed by others to enhance its products without incurring the significant capital expenditure required to develop its own AI capabilities. Apple’s capital expenditures are projected to be around US$14 billion in its fiscal year ending September 2026, significantly less than Microsoft’s projected US$94 billion and Meta’s US$70 billion. Apple designs, develops, and sells consumer electronics, computer software, and online services.
While Apple’s stock performance has lagged behind other tech giants this year, rising only 8.4 per cent compared to Alphabet’s 52 per cent and Nvidia’s 45 per cent gains, it has shown resilience amid recent tech sell-offs. When tech shares were impacted by concerns about AI spending, Apple outperformed its competitors and the major indexes. Over the second half of the year, Apple shares have climbed 32 per cent, surpassing the S&P 500, Nasdaq 100, and many of its Big Tech peers.
On Tuesday, Apple shares rose by 2.3 per cent in New York trading. The company’s strategy of tapping into existing AI models instead of developing its own costly infrastructure seems to be resonating positively with investors who are wary of the substantial investments and uncertain returns associated with AI development.
