Why Apple Emerges as a Safe Bet While AI Infrastructure Spending Faces Heat

Tech investors are flocking to Apple as scrutiny over AI infrastructure costs intensifies. The trillion-dollar giant's diversified revenue streams and fortress-like balance sheet make it a rare stability play in a sector burning cash on unproven AI bets.

Wall Street's latest darling? The company that sells overpriced dongles while startups chase AGI dreams on venture capital fumes. Tim Cook must be laughing all the way to the bank—again.

Capital spending comparisons draw attention

The plan described by analysts is that Apple can incorporate AI features by using models built by other firms, bringing those capabilities to millions of device users without committing to the scale of internal development pursued by its peers.

Brian Pollak of Evercore said Apple has the least AI spending exposure among the group often called the “Mag 7,” while still being in position to benefit if demand for AI-driven features grows.

In the current fiscal year that runs through September 2026, Apple is projected to spend about $14 billion in capital expenditures.

In comparison, Microsoft is set to spend more than $94 billion in its fiscal year ending in June, and Meta, which is about half Apple’s size, plans to spend more than $70 billion in 2025. Those figures have shaped market reactions throughout the year.

Stock performance has reflected that difference. In a year defined by AI-led rallies, Apple has gained 7.6%, making it the lowest performer among the Magnificent 7.

Alphabet has risen 53%, and Nvidia has increased 48%, while both the S&P 500 and the Nasdaq 100 have also recorded stronger gains. However, when concern about the level of AI spending rose last week and tech stocks declined, Apple moved differently.

It finished the week almost unchanged while others fell sharply. Over the second half of the year, Apple shares have risen 31%, exceeding the returns of major indexes and many of its tech peers.

Brian Pollak noted that the company has strong cash FLOW and a strong balance sheet, which helps it act defensively relative to companies that have committed to larger AI spending. On Monday, the difference was visible again.

AI-linked stocks rose on Optimism tied to the end of the U.S. government shutdown under President Donald Trump, while Apple traded sideways due to concern over reported delays to next year’s iPhone Air model.

Investors look for returns while AI valuations rise

As spending expands, some investors have raised concerns about whether current valuations can be supported. Mark Grant of Colliers Securities said momentum has slowed and that there is less willingness to buy dips in AI-related names, stating that valuations have become difficult to justify.

The market response to recent earnings results showed the split. Apple shares ROSE almost 3% after its latest report, even though revenue in China fell.

In contrast, Meta and Microsoft shares declined after releasing guidance that reflected the impact of continued spending.

On October 30, Meta dropped more than 11%, which was its largest single-day fall in three years, after Mark Zuckerberg stressed the need to continue increased AI investment.

There is still confidence in long-term demand for AI infrastructure, though. Bank of America analyst Vivek Arya said skepticism about AI spending is understandable but could also prevent excessive positioning in the space.

He wrote that recent declines were influenced by external events, such as the government shutdown, while underlying demand remained firm.

That has raised questions about the role Apple will play going forward. Vikram Rai of First New York argued that Apple is not acting as a hedge against AI but is instead a lagging stock that may not generate strong outperformance for portfolios seeking higher returns.

Meanwhile, SoftBank sold its entire stake in Nvidia, receiving $5.8 billion as Masayoshi Son plans new investments aimed at building influence in artificial intelligence.

Nvidia was among the weaker performers in premarket trading compared with the rest of the Magnificent 7 on Tuesday.

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