How Apple defied the tech stocks’ rout as AI spending fears hit rivals

Tech stocks have struggled in recent days amid fears of overspending on artificial intelligence and a sharp selloff in software and semiconductor names.

Apple, however, has emerged as a rare outperformer, bucking the broader downturn and attracting renewed investor interest.

Shares of Apple were up about 6% this week as of Thursday morning, making it the only “Magnificent Seven” stock in positive territory.

Over the same period, the Nasdaq has fallen roughly 3%.

On Wednesday alone, Apple beat the Nasdaq by four percentage points, its biggest single-day outperformance in more than a year, according to Dow Jones Market Data.

Apple stands out amid tech rout

The rally marks a notable shift for the iPhone maker, whose stock had underperformed for much of the past year due to concerns that it was lagging peers in artificial intelligence.

Apple shares rose 8% in 2025, well below the S&P 500’s 16% gain.

This week’s performance comes as a wave of selling hit the software sector after Anthropic launched a new legal tool for its Claude chatbot, stoking fears that AI could disrupt traditional software businesses.

Since Tuesday, the selloff has erased more than $1.2 trillion in market value from software and semiconductor companies, according to Dow Jones Market Data.

At the same time, investors have grown uneasy about the scale of AI-related capital spending announced by Big Tech firms.

Meta Platforms recently forecast up to $135 billion in capital expenditures for 2026, while Alphabet said it could spend as much as $185 billion next year on AI investments.

Against that backdrop, Apple’s comparatively restrained approach has become a selling point.

The company is expected to spend about $13 billion on capital expenditures in 2026, far less than its largest peers.

Earnings boost and rotation within tech

Apple’s gains have also been supported by a strong earnings report 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.

“Shares of Apple may be benefiting as investors move money out of software stocks and look for new opportunities within the tech sector,” Andrew Graham, founder and portfolio manager at Jackson Square Capital, said in a MarketWatch report.

Anthropic’s recent release, he added, has “only added more fuel to a software-sector meltdown that’s been going on since July.”

Apple briefly reclaimed its position as the world’s second-largest company by market capitalisation on Thursday, with a valuation of about $4.05 trillion, narrowly ahead of Alphabet’s $4.00 trillion.

The stock’s resilience has come even as questions linger around its AI strategy and its partnership with Google to power Apple Intelligence.

Critics have argued that outsourcing key AI capabilities could limit Apple’s long-term competitiveness.

Still, the company’s lower spending profile has resonated with investors as concerns mount over whether massive AI investments will generate near-term returns.

Pricing questions loom amid memory chip shortage

Looking ahead, Apple faces another strategic decision as a global memory chip shortage pushes component prices higher.

CEO Tim Cook acknowledged on the company’s earnings call that memory costs are expected to rise sharply but declined to say whether Apple would pass those costs on to consumers.

“There are different levers that we can push, and who knows how successful they’ll be, but there’s just a range of options,” Cook said.

Analysts believe Apple’s scale and long-standing supplier relationships could allow it to secure enough memory chips, even as rivals struggle.

If Apple holds prices steady while competitors raise them, iPhones could become more attractive, potentially boosting market share. A price increase, however, could give rivals room to follow suit.

“This is the biggest question for the industry now,” said Nabila Popal, a senior research director at IDC in a Reuters report. “This is a two-sided sword because if Apple doesn’t raise prices, while it will help grow market share, it will also upset investors.”

For now, Apple’s combination of strong iPhone demand, cautious spending, and relative insulation from the software selloff has positioned it as a haven within a turbulent tech sector, even as broader questions about AI, pricing, and supply chains continue to hang over the industry.

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