"Beyond the Storm": Apple's Market Cap Rises by $600 Billion Amid AI Skepticism

Investors are flocking back to Apple shares, pushing the iPhone maker’s stock to new highs. Growing anxiety over the enormous costs of artificial intelligence is weighing on the stock prices of chipmakers and cloud computing giants, according to Bloomberg. However, these concerns have not affected Apple: the company’s decision not to participate in the data center arms race is increasingly viewed by the market as an advantage rather than a disadvantage, the agency notes.

Since hitting a low on June 25, Apple's stock has risen 16.7%. This has increased the company's market value by $600 billion, according to Bloomberg.

During the same period, the Philadelphia Stock Exchange Semiconductor Index fell 7% amid concerns about the sustainability of AI computing costs. The S&P 500 rose 3%, while the tech-heavy Nasdaq-100 rose only 1.3%.

During trading on July 13, Apple’s stock rose 0.5%; year-to-date, it is up 18%. This rise has made the company the fastest-growing among the “Magnificent Seven” tech giants.

“There’s a battle raging in the market, and right now Apple is winning because it’s weathering the storm that’s engulfed the rest of the AI sector,” Bloomberg quotes Mark Bronzo, chief investment strategist at Rye Strategic Partners, as saying. “There are arguments that semiconductor manufacturers have gotten too far ahead of themselves. As a result, investors have once again flocked to Apple as a stable company that doesn’t carry those risks.”

The strategist said that he personally owns Nvidia stock rather than Apple stock, since both Nvidia’s growth rate and valuation appear more attractive. “However, as long as we’re in a period of market uncertainty, Apple’s cash flow and its services business will help its stock move higher. If you believe that capital expenditures on AI will continue to rise, buy Nvidia. But if you think they’ll slow down, Apple is the better choice,” he said.

Analysts quoted by Barron's predict that Meta Platforms, Oracle, and Amazon will report negative free cash flow in 2026 due to their investments in AI. Apple is expected to increase its free cash flow from $109 billion to $143 billion, according to FactSet. Its capital expenditures in 2026 are likely to decline, Barron’s reports.

“[Apple] has certainly fallen out of favor with the market, but it faces far less direct short-term risk associated with carrying out its plans,” says Jordan Klein, an analyst at Mizuho Securities.

Apple’s resilience looks even more impressive when you consider that it faced a threat to its profit margins due to the rapid rise in memory chip prices, Bloomberg notes. In response, the company raised prices on Mac computers, iPads, and home gadgets in late June, leading to the sharpest one-day drop in its stock price since April 2025.

Analysts have assessed the decision: they believe Apple is less vulnerable than other consumer device manufacturers, as its customers are unlikely to forgo a purchase due to higher prices, the agency reports.

Investors see the upcoming release of the foldable iPhone, expected in September, as a potential catalyst for a rise in the stock price. The device is expected to be expensive but will encourage customers to buy it. In early July, Nikkei reported that Apple had instructed its suppliers to prepare to ramp up production to approximately 10 million foldable iPhones this year.

“While Apple is shielded from the current weakness in AI-related trading, the main reason not to sell its [stock] is that it likely has a massive hit on the horizon. Prices for the foldable phone will be so high that it will offset the impact of memory chips on margins, and I think demand will be so strong that it will really drive [business] growth,” said Louis Navellier, chief investment officer at Navellier & Associates.

Of the 52 analysts covering Apple stock, 32 recommend buying it. Seventeen advise holding onto the stock, and only three suggest selling it.

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