Apple performing like a safe haven amid AI spending fears, volatility

Apple stock has risen 27% in 2026 to make it the biggest contributor to the S&P 500’s 12% year-to-date gain, Bloomberg reports. That is by far the best performance among the Magnificent Seven tech giants, including Meta, Tesla, Nvidia, Apple, Amazon, Alphabet, and Microsoft. It also marks a sharp reversal from 2025, when the iPhone maker gained just 8%, putting it near the bottom of the group, Bloomberg notes.

As sentiment toward AI swings sharply, betting on Apple has become one of the most reliable trades in the equity market: Whatever AI stocks do, Apple moves in the opposite direction, Bloomberg writes. That pattern held on Thursday as the Nasdaq Composite lost 2.5% and the Roundhill Magnificent Seven ETF fell 3%, Apple rose 0.7%.

The reason for the divergence is fairly simple, Bloomberg notes. Most tech giants are spending heavily on AI infrastructure, while Apple is largely sitting out the race. Instead, it is focusing on what it has historically done best: creating products that generate consumer excitement, such as the new foldable iPhone Duo.

With Wall Street’s view of AI spending seemingly in constant flux, Apple stock has become investors’ preferred way to maintain exposure to Big Tech while avoiding some of the group’s volatility.

“Apple is a very liquid hedge against AI volatility, and it’s a great position to have if you’re starting to get worried about AI but still want tech exposure,” said Jordan McCall, senior portfolio manager at Russell Investments. The company manages $434 billion in assets and owns Apple stock in several portfolios. “Apple is a flight to safety when the market gets nervous,” McCall explains.

Apple stands out among its Big Tech peers thanks to strong free cash flow and durable earnings growth, McCall said, while Microsoft, Amazon, Alphabet, and Meta have seen free cash flow plunge or even turn negative as they invest in AI infrastructure. Chipmakers are still growing rapidly, but investors fear their earnings could drop sharply if tech giants start cutting spending.

Investors are seeking safety because sentiment toward AI is changing so quickly. Stocks of the biggest AI spenders like Microsoft, Amazon, Alphabet, and Meta, along with the chipmakers central to AI infrastructure, have been swinging between gains and losses as Wall Street debates when, and whether, hundreds of billions of dollars in capex will pay off. Apple stock has an increasingly negative correlation with semiconductor stocks and often moves in the opposite direction of its tech peers, Bloomberg notes.

In Thursday’s broad U.S. equity selloff, for example, when the Nasdaq Composite fell 2.4% and the S&P 500 lost 1.4%, the iPhone maker was trading in positive territory, up 0.7%. Last week, when concerns about cloud computing provider CoreWeave’s debt triggered widespread selling of AI stocks and the Philadelphia Stock Exchange Semiconductor Index (SOX) tumbled more than 11%, Apple gained 2%. The company stated that demand for the foldable iPhone Duo had been “nothing short of extraordinary.”

“If hyperscalers get more bad news, it would make sense to sell the SOX and use the money as a source of funds to buy Apple,” reckons Michael Matousek, head trader at U.S. Global Investors. Apple is more of a defensive play, he said, because it lacks exposure to the factors driving chip stocks. “Apple is more of a defensive play because it lacks exposure to the themes moving chips, and given how pronounced this kind of pair trade has become, it is so much easier to just go with the momentum. I wouldn’t fight it,” he added.

The main concern for Apple shareholders are that the company is growing more slowly than its Big Tech peers amid a lofty valuation. Apple is set to report fiscal-fourth-quarter earnings in a few weeks. Revenue is expected to grow around 15% in fiscal 2026, well below the tech sector overall, according to Bloomberg Intelligence data. In addition, revenue growth is projected to slow to 9.7% in fiscal 2027 and 5.5% in fiscal 2028.

Meanwhile, Apple trades at 36 times earnings, its highest multiple since January 2008, Bloomberg notes. That is twice Nvidia’s valuation and well above the average valuations of companies in the Nasdaq 100 and S&P 500 indexes. This combination could make it difficult for Apple to keep outperforming the market, especially if sentiment toward the biggest AI spenders and chipmakers improves again, Bloomberg notes.

Wall Street remains broadly upbeat on Apple stock, with 27 recommendations to buy (“overweight” and “buy” ratings), versus 14 “hold” and five “sell” calls. Still, the average target price of $335.44 per share is around $10 below the current market price, with the stock trading at around $346 per share on Thursday.