Earlier this year, Apple's stock took a significant hit as the iPhone maker faced criticism for lacking a clear artificial intelligence strategy. However, as the AI industry encounters growing skepticism, Apple's initial hesitation has transformed from a weakness into a strength—a shift now reflected in its market performance.

In the first half of 2025, Apple ranked second-to-last among the "Magnificent Seven" tech giants in stock performance, with its shares dropping 18% by the end of June. Since then, the tide has turned: Apple's stock has surged 35%, while AI-focused peers like Meta Platforms and Microsoft have declined, and even Nvidia has underperformed. During the same period, the S&P 500 rose 10%, and the tech-heavy Nasdaq 100 gained 13%.

"It's remarkable how they've stayed disciplined and controlled spending while everyone else rushed in the opposite direction," said John Barr, portfolio manager of the Needham Aggressive Growth Fund, which holds Apple shares.

As a result, Apple's market capitalization has reached $4.1 trillion, making it the second-largest company by weight in the S&P 500, surpassing Microsoft and closing in on Nvidia. This shift reflects growing market doubts about tech giants' massive AI investments while highlighting expectations that Apple stands to benefit when the technology matures for broad adoption.

"While Apple will inevitably integrate more AI into its phones, the company has successfully sidestepped the AI arms race and its accompanying massive capital expenditures," said Bill Stone, Chief Investment Officer at Glenview Trust Company, who holds Apple shares and views it as "a kind of anti-AI investment play."