Apple’s stock took heavy pressure earlier in the year as the company faced nonstop complaints over the absence of a clear AI plan under chief executive Timothy Donald Cook.
At that point, the lack of an AI push had been treated as a liability by traders long enough that the term ‘Tim Cooked’ became viral on Twitter, Reddit, and TikTok.
As scrutiny tightened around the huge money being thrown into AI across Big Tech, that same delay began to show up in the stock price as a strength instead of a flaw.
Through the first six months of 2025, Apple ranked as the second‑worst performer inside the Magnificent Seven, having dropped 18% by the end of June.
That crash flipped after mid‑year. Since then, the stock climbed 35%, while Meta and Microsoft moved into negative territory, and Nvidia started lagging. Over the same stretch, the S&P 500 Index gained 10%, and the Nasdaq 100 Index rose 13%.
Apple gains ground as rivals bleed
John Barr, portfolio manager at the Needham Aggressive Growth Fund, which holds Apple shares, said the spending gap between Apple and its peers stood out.
“It is remarkable how they have kept their heads and are in control of spending, when all of their peers have gone the other direction,” John said. That contrast now shows up in size.
Apple’s market value reached $4.1 trillion, giving it the second‑largest weight in the S&P 500, overtaking Microsoft and moving closer to Nvidia in index ranking. The standing reflects growing doubt around the hundreds of billions of dollars Big Tech companies are committing to AI buildouts, while Apple holds a position that allows it to benefit later without matching that cash burn today.
Bill Stone, chief investment officer at Glenview Trust Company, which also owns Apple, described the stock as an outlier inside the AI trade.
“While they most certainly will incorporate more AI into the phones over time, Apple has avoided the AI arms race and the massive capex that accompanies it,” Bill said.
He labeled the stock “a bit of an anti‑AI holding.” The position places Apple outside the spending surge without removing its path into AI‑driven products down the line.
Valuation tightens as holders reposition
The recent rally pushed Apple’s valuation to levels rarely seen over the past decade and a half, as it now trades at about 33 times expected earnings over the next 12 months.
That range has only appeared a few times in the past 15 years, with the prior peak at 35 times earnings in September 2020. Over that full span, Apple’s average multiple stayed below 19 times.
Craig Moffett, co‑founder of research firm MoffettNathanson, questioned the current pricing. “It’s really hard to see how the stock can continue to compound value at a level that makes this a compelling entry point,” Craig said. He added, “The obvious question is, are investors overpaying for Apple’s defensiveness? We think so.”
Apple whale Berkshire trimmed its stake by 15% in Q2, then built a position in Tim’s rival Alphabet in Q3, though Apple remains Berkshire’s largest equity holding by market value inside the portfolio to this day.
From a chart perspective, Jonathan Krinsky, chief market technician at BTIG, warned last week that Apple’s price sits far above long‑term trend lines. He wrote that the stock looks “poised for a drop, especially as we look ahead to January,” based on how far it stands over its 200‑day moving average.
In the same note, Jonathan added that the “long‑term trend for AAPL remains unquestionably bullish.”
“The stock is expensive, but Apple’s consumer franchise is unassailable,” said Craig. “At a time when there are very real concerns about whether AI is a bubble, Apple is understandably viewed as the safe place to hide.”
Within the Magnificent Seven Index, Apple now ranks as the second‑most expensive stock, behind only Tesla, which sits near 203 times forward earnings.
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