The Most Ironic Scene Amid the AI Wave: Apple Does Not Contend, So No One in the World Can Contend With It?

①Wall Street tech stocks are staging a highly ironic scene; ②Apple, once criticized for its "slow AI strategy and insufficient investment," has now become a "safe haven" from the AI money-burning trap thanks to its extremely restrained capital expenditure. Cailianshe, July 28 (Editor: Xiaoxiang) Wall Street tech stocks are staging a highly ironic scene: Apple, once criticized for its "slow AI strategy and insufficient investment," has now become a "safe haven" from the AI money-burning trap thanks to its extremely restrained capital expenditure.

This scene seems to carry a certain resonance with the line from the Dao De Jing: "It is precisely because he does not contend that no one in the world can contend with him"...

Market data shows that Apple's stock rose more than 1% against the trend on Monday, closing at a record high of $336.91, with its total market value soaring to about $4.93 trillion. Meanwhile, chip giant Nvidia's stock plunged nearly 5% that day, with its market value shrinking to $4.78 trillion — Apple thus overtook Nvidia and reclaimed the throne of the world's most valuable listed company.

According to Dow Jones Market Data, Apple's stock performance so far in July has outperformed the Nasdaq 100 index by 23 percentage points, setting the largest monthly outperformance of this tech stock index since 2005. At the same time, Apple's performance has also clearly outpaced the other constituents of the Magnificent Seven, because investors increasingly view the company's restrained AI spending as an advantage rather than a disadvantage.

Analysts said the swap in market value rankings between Apple and Nvidia shows growing skepticism in the market toward capital-intensive artificial intelligence buildouts. Nvidia, as the chipmaker at the center of the AI boom, had held the "world's most valuable stock" throne for more than a year after overtaking Apple in May 2025. However, the selling pressure the company has faced in recent months has clearly intensified. Nvidia's stock currently trades at a forward price-to-earnings ratio of 18.2 times, down from 25.5 times at the start of the year.

Jay Woods, chief market strategist at Freedom Capital Markets, said, "Apple was criticized for not spending more on AI, but right now, they have instead successfully avoided some of those capital expenditure traps."

In recent years, Apple has consistently taken an extremely prudent approach to capital expenditure. AlphaSpace data shows that the company's capital expenditure has trended downward over the past three quarters rather than increasing — a sharp contrast with the broader trend in the tech industry.

Dan Niles, founder of Niles Investment Management, put it bluntly in a television interview: "Sometimes you get lucky by accident because of 'incompetence.'"

He said Apple once performed "poorly" in bringing AI to the iPhone, but that has now turned into a huge advantage on the balance sheet.

The contrast between the giants is extremely clear. Last week, Google parent Alphabet raised its 2026 capital expenditure guidance to $195 billion to $205 billion in its earnings report, and the huge spending directly pushed its second-quarter free cash flow negative — the first time since the company's IPO in 2004. Tesla also expanded spending as it ramped up research and development of robotaxis and robots. Both companies' stocks suffered sharp declines after their earnings reports.

Apple, by contrast, has chosen an "asset-light" route. According to reports, Apple pays Google only about $1 billion a year in licensing fees to use a customized Gemini model for Siri's AI upgrade, enjoying AI benefits at extremely low cost and avoiding the massive cash burn of training large models from scratch.

As a result, even though Apple also faces cost pressures on the supply side from rising memory chip prices, the iPhone maker's stock has still maintained a steady upward trend in 2026. Bernstein analyst Stacy Rasgon noted that even in the face of a memory shortage and pricing pressure, demand for Apple's iPhone remains strong, with its share of the global smartphone market rising against the trend to 20% from 17% a year earlier.

Valuation concerns

Of course, with the earnings season approaching, Apple's stock is not entirely worry-free at the moment.

Niles is currently not very satisfied with Apple's high valuation level. Apple's price-to-earnings ratio is currently at a high of more than 30 times, well above the S&P 500's roughly 22 times.

He warned that if Thursday's Apple earnings report disappoints, especially if rising semiconductor prices squeeze margins, Apple could be at risk. Memory chip costs have soared this year, a trend that has already forced price increases across the phone market.

"You can't put all the money in the world into this one stock just because they didn't spend on AI," Niles said. "At this valuation level, that doesn't make sense."

Wall Street institutions currently expect Apple's second-quarter revenue to be close to $108.9 billion, with earnings per share of $1.89, up from $1.57 a year earlier. Investors will closely assess whether Apple Intelligence can be delivered smoothly without driving up capital expenditure or eroding operating margins.

Thursday's earnings release also falls in a week packed with earnings from tech giants, with Meta and Amazon also reporting in the same week and facing similar scrutiny over AI spending.

It is worth noting that Thursday's earnings conference call will also be Tim Cook's "farewell show" as Apple CEO presiding over a results meeting. Cook will step down as CEO on September 1 and become executive chairman, formally handing the helm of Apple to senior hardware engineering executive John Ternus. In any case, what Cook leaves his successor is not only a record market value scorecard, but also the most unique safe haven in this round of the AI frenzy.