An analyst named Apple the best choice among Big Tech stocks. It's all about its independence.

Among the “Magnificent Seven” stocks Apple shows the lowest correlation with both other Big Tech stocks and the entire S&P 500 index, noted Jessica Rabe, co-founder of the analytics firm DataTrek Research, as quoted by MarketWatch. According to the analyst, this shows that the market values Apple’s conservative AI strategy, and investing in it can serve as a hedge against portfolio volatility. However, when the market is optimistic about AI, this can, conversely, work against the company, as Bloomberg previously reported.

Over the past 100 days, the correlation coefficient between Apple’s stock returns and the S&P 500 index returns was just 0.24—the lowest among the “Magnificent Seven,” notes MarketWatch. This coefficient reflects how closely the price movements are linked: the higher the positive value, the more they tend to move in the same direction, while a negative value indicates movement in opposite directions. If the coefficient is close to zero, it suggests that the correlation is weak or nonexistent.

By comparison, this figure stands at 0.67 for Nvidia and 0.66 for Tesla. According to DataTrek’s calculations, this means that market dynamics account for only about 6% of the changes in Apple’s returns, whereas for Nvidia and Tesla, they account for nearly half.

In addition, the data shows that Apple’s stock performance is virtually uncorrelated with the performance of the largest cloud providers—Amazon and Alphabet.

Apple’s business is built around an ecosystem of consumer devices and services, rather than cloud infrastructure or ad-dependent platforms, Reib wrote. The company is charting a completely different course in its artificial intelligence strategy, she added. Indeed, while Microsoft, Amazon, and Alphabet are spending massive amounts on AI, Apple has chosen to develop AI services through partnerships and is avoiding a capital expenditure race for computing infrastructure.

“If we had to choose a single stock based solely on this data, it would definitely be Apple. Its low correlation with the market and with all other major tech companies shows that the market has fully recognized the value of its cautious AI strategy,” the analyst said.

Adding a stock to an investment portfolio that has little correlation with the broader market should improve the portfolio's risk-return profile, Raeb wrote.

By focusing on hardware products rather than chasing the latest AI technologies, Apple has grown its installed base to 2.5 billion active devices, according to MarketWatch. “The company’s continued dominance in the premium smartphone segment means it will be able to monetize any truly useful consumer products featuring artificial intelligence,” the analyst predicts.

Since the start of the year, Apple’s stock has risen 16%, making it the second-best performer among the “Magnificent Seven” stocks after Nvidia, according to MarketWatch. The two companies’ stock prices are not moving in lockstep: Nvidia’s stock has fallen 2% since the start of the week amid a broad sell-off in the semiconductor sector, while Apple has been largely unaffected by the sell-off, with its market capitalization rising by about 4% over the same period, the publication points out.

That said, not everyone believes that low correlation is a good thing. Jordan McColl, a senior portfolio manager at Russell Investments, told Bloomberg that it’s more like a “see-saw.” The company’s refusal to participate in the spending race helped its stock rise steadily in the first half of the year, shielding it as market sentiment toward the AI boom grew increasingly skeptical. But now the mood has shifted, and Apple’s stock has come under pressure.

Since closing at a record high on July 28, they have lost 7% of their value. Investors began selling them off following the company’s disappointing forecast , in which it warned of component supply constraints. In contrast, strong results from Microsoft, Amazon, and Alphabet allayed fears of excessive spending on AI, and investors began shifting funds into Big Tech stocks.

30 of the 47 analysts covering Apple stock recommend buying it. 12 of them are neutral, and only five recommend selling.

This article was AI-translated and verified by a human editor