Apple’s shares outperformed every other Magnificent Seven stock on Tuesday, underscoring investors’ growing preference for the company amid a shift away from tech firms pouring massive funds into artificial intelligence.
Investor enthusiasm for Big Tech’s huge AI spending announcements has cooled considerably. Wall Street is now prioritizing actual returns as these expenditures continue to climb. Meanwhile, software stocks are under heavy pressure, with attention turning to the risk that AI could eventually replace tasks currently handled by specialized applications.
Angela Palumbo for Barron’s:
“One of the reasons people loved investing in megacap technology was these are earnings and cash flow generating machines, and they’ve done it without a lot of fixed assets and a lot of fixed costs,” said Steve Sosnick, chief strategist at Interactive Brokers. “Well, this [AI spend] is changing that dramatically. It’s sopping up a lot of that free cash flow, and it’s adding a lot of fixed costs and fixed assets to these companies’ balance sheets.”
As Barron’s has previously reported, collective capital expenditures this year from Microsoft, Alphabet, Amazon.com, and Meta Platforms are expected to be about $650 billion.
“People do look at it [Apple] as a safe haven against this big AI spending, this ROI [return on investment] story, just because their capex is relatively low compared to other hyperscalers,” said Ryuta Makino, research analyst at Gabelli Funds.
Apple’s 2025 capital expenditures were $12.7 billion. Wall Street expects the company to report 2026 capex of $12.9 billion. In comparison, Meta said in January that it expects full-year capex to be between $115 billion and $135 billion…
“Apple remains an earnings juggernaut and a cash flow monster. And they’ve got hundreds of billions of dollars in cash and they’re not spending it on AI,” Sosnick said.
MacDailyNews Take: Just wait until Apple begins to release Apple Intelligence features underpinned with — but privacy-protected from — Google Gemini and things like Siri begin to actually work as well as, or even better than, people expect them to work in 2026. The sky’s the limit for Apple stock!
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
While this is nice, the truth is, Apple stock is WAY under performing its true potential, mainly because of Tim Cooks poor leadership.
• Lacking vision
• Lacking solid supply chain, when it matters (holiday season)
• Lacking solid, improved, software updates that are better than last version
• Lacking – Announcing • Releasing • Reporting financials in ONE quarter, to maximize FREE media exposure and demand for products, and then show an accurate sales metric
• Some poor acquisitions (see beats… and missing Adobe and Avid)
• Terrible communication with developers with OS updates. Like having to go into a security and privacy to “allow” a known developer access to actually operate. And every new update, it gets harder to dig and find where that ability even is. Terrible!!!
• Largest company, with the most amount of cash on hand, just can’t seem to hire competent programers to get AI to work…
• Stifle your users ecosystem, but not allowing anyone to say anything but praise for Apple; so you’ll never know all the issues that NEED to be fixed with your software.
• MacPro – left in the dust, with no new chip updates for 3 years????
• No small-form phone options, even though there is a demand for a smaller phone
• iTunes.Apple Music, Photos, Contacts has gotten worse with every update .. embarrassing..
If Steve Jobs were alive today, many people at Apple would have already been replaced.
Tim Cook, while a nice guy, is NOT a vision leader to accomplish the needs of Apple.
He is not busting balls enough to maintain the quality and efficiency of Apple’s needs.
It is time for Tim to retire. I like Tim. Just not as a CEO. He executed Steve’s vision well, but now he’s out of plays from Steve, and it’s time for a new aggressive CEO with vision. Apple stock SHOULD have passed $350 already. There should be a dividend increase to help pump the stock a little over the $300 hump.
I should run the company. I can do a WAY better job at having vision and being aggressive.
I also would INCLUDE my developers and customers, to create a healthy, sustainable ecosystem.
“Tim is a nice guy….”
Let’s get Scott–Mr. Maps–Forstall to confirm that claim.
AAPL back down the toilet today, where it was 14 months ago.