In recent days, tech stocks struggled amid concerns about artificial intelligence overspending and sharp declines in semiconductor and software names.
Apple has, on the other hand, emerged as an outperformer that is bucking a broader decline and drawing renewed investor attention.
Apple shares were up 6% as of the morning of Thursday, which makes it the sole “Magnificent 7” stock to be in positive territory.
The Nasdaq fell roughly 3% over the same time period.
According to Dow Jones Market Data, Apple’s performance on Wednesday was its best in over a year.
Apple shines amid technology rout
This rally is a significant shift in fortunes for Apple, which had been underperforming for most of the last year on account of concerns it lagged behind its peers when it came to artificial intelligence.
Apple’s shares will rise 8% by 2025, a far lower rate than the S&P 500 which is expected to grow 16%.
The performance of this week comes amid a selling wave in the software industry after Anthropic released a legal tool for its Claude bot, stoking concerns that AI might disrupt traditional software companies.
Dow Jones Market Data reports that since Tuesday the market has lost more than $1,2 trillion from semiconductor and software companies.
Investors are also becoming uneasy with the amount of capital expenditure related to AI announced by big tech firms.
Alphabet has said that it may spend up to $185 billion on AI next year, according to a recent forecast by Meta Platforms.
Apple’s relatively restrained approach is a major selling point.
In 2026, the company expects to invest about $13 billion in capital expenditures. This is far lower than any of its competitors.
Rotation within the tech sector and earnings boost
Apple’s growth has also been backed by the strong earnings report that was released last week.
The company posted record iPhone sales and delivered stronger-than-expected guidance on revenue and gross margins, easing worries that rising memory costs would squeeze profitability.
MarketWatch reported that “Shares in Apple could benefit as investors shift money away from software stocks to look for opportunities within the technology sector,” Andrew Graham said. Graham is founder and portfolio manager of Jackson Square Capital.
He added that Anthropic’s latest release has “only added fuel to the software sector meltdown which’s been ongoing since July.”
Apple briefly took over Alphabet as the second largest company in terms of market capitalisation. The valuation was $4.05 trillion.
Apple Intelligence’s partnership with Google and Apple’s AI strategy have raised questions about the stock.
Some critics have suggested that Apple’s competitiveness could be affected by outsourcing its key AI abilities.
Investors are concerned about whether AI investment will yield a return in the near term.
Pricing questions loom amid memory chip shortage
Apple will have to make another decision in the future as global shortages of memory chips push component prices up.
Apple’s CEO Tim Cook confirmed on its earnings call on Tuesday that the cost of memory is expected to increase sharply, but declined to comment on whether Apple will pass these costs onto consumers.
Cook explained that there are a variety of levers we could use. “We don’t know how effective they will be but it’s merely a list,” he said.
Apple is believed to be able to obtain enough memory chips due its size and relationships with suppliers.
iPhones may become more appealing if Apple keeps prices the same while its competitors increase them. This could boost market share. Price increases could encourage rivals to increase their prices.
Nabila Popal is a senior researcher at IDC. She said in a Reuters article that “This question has become the most important for the entire industry.” This is a double-edged sword, because while Apple’s failure to raise its prices will increase market share, investors will be upset.
Apple is a safe haven in a volatile tech industry, thanks to its combination of high iPhone demand, prudent spending and relative isolation from the sell-offs.
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