Hardly any other company has written such a success story on the stock market as Apple. When Tim Cook took over the leadership from co-founder Steve Jobs in 2011, the iPhone company was already worth around 350 billion dollars - today it is more than 4.5 trillion. Anyone who invested $100 in Apple back then would have made more than $2,700 by now. And this despite the fact that Apple has long lagged behind in the biggest technology trend of the past few years: artificial intelligence.
But it is precisely this gap that is now viewed differently on the stock market. Because Apple invests significantly less in AI infrastructure than other large technology companies, the group ties up less capital and keeps free cash flow, i.e. available liquidity, high.
Apple is investing significantly less in AI infrastructure
This is also reflected in the balance sheet: Apple's tangible assets - including office buildings and data centers, for example - recently amounted to around $50 billion. According to an evaluation by the Financial Times based on S&P Capital IQ, this is only enough for 40th place in the S&P 500. In the past four years, Apple's fixed assets only increased by 28 percent. For comparison: At Microsoft they increased by 285 percent in the same period, at Meta by around 200 percent and at Alphabet by 180 percent.
“This capital discipline ensures high margins on the one hand and at the same time enables share buybacks worth billions,” emphasizes Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management, in an interview with the ARD finance editorial team. This could now even be an advantage, because the big AI investors still have to prove to their shareholders that these enormous expenses are paying off.
Why Apple's AI reluctance irritates investors
This makes Apple attractive to investors who want to protect themselves against the risks of the AI investment boom. The US business magazine Barron's even considers Apple to be "the most defensive stock on the stock market". Eckhard Schulte, asset manager at MainSky Asset Management, also sees Apple shares as a “hedge” - i.e. protection - against a possible bubble in artificial intelligence. So is Apple winning the AI game by not playing in the first place?
According to consensus estimates from S&P Global and Wisdom Tree, Alphabet, Amazon, Meta and Microsoft will together spend about $700 billion this year - most of it on data centers, chips and other AI infrastructure.
Next year, investment spending for these four companies is expected to exceed the $1 trillion mark. If you add Oracle and SpaceX, it could even be $1.3 trillion.
Apple is taking a different approach to AI
However, experts and investors have recently been increasingly critical of whether and when the tech companies' AI investments will pay off. At the same time, Apple's lower AI spending is only an advantage if the company still delivers new products that customers are willing to pay for.
Apple is also developing its own AI, but at the same time relies on partners like Google and is therefore pursuing a more pragmatic approach: "Apple's goal is to make AI available on the end devices of very wealthy Apple customers for everyday use," emphasizes Schulte from MainSky Asset Management.
How Siri became smarter
But that's exactly what has been noticeably lacking recently - Apple's voice assistant Siri has become a symbol of the company's AI lag: simple commands, yes, real dialogue capability hardly. In June, Apple announced a major reboot with "Siri AI" and showed a beta version - the new Siri can handle more complex tasks across multiple apps for the first time.
The first practical tests are cautiously positive: The US technology magazine Wired wrote at the beginning of the month that Siri AI was more powerful, but not yet a technological breakthrough. For parts of the new Siri, Apple uses Google's AI model Gemini. “It is therefore only logical that the first expansion stage of Siri AI feels a little like 'Gemini, circa 2025',” says the tech portal The Verge.
Why Apple doesn't need the best AI
The bottom line is that Siri has apparently become smarter, but still lags behind competitors like Google Gemini, ChatGPT and Claude. So Apple is just catching up instead of leading the market. But the company may not have to do that at all.
“The decisive factor will be whether Apple gets AI integrated into its devices in such a way that users experience real added value and remain even more part of the Apple ecosystem,” says investment strategist Kemper. If this succeeds, AI could even become more important for Apple's long-term growth than new hardware alone.
Foldable iPhone should bring new growth
At Apple's "Surprise and shine" product show today, however, new hardware will be particularly the focus. According to media reports, the company is set to present its first foldable iPhone. “The iPhone is the most important product for Apple with over 50 percent of sales,” emphasizes asset manager Schulte. Innovations are needed here.
Foldables are seen as a way to achieve higher sales prices and margins. Apple would thus enter a market previously dominated by Samsung. In addition, the group is also working on other product innovations - from AI-enabled AirPods with cameras to new smart home products.
Apple is planning table robots for the smart home
One of the more ambitious projects is a type of table robot for use in the home. According to Bloomberg, the display will sit on a movable robot arm.
The device is therefore intended as a mixture of a smart home center, communication device and personal AI assistant - according to market rumors, it could come onto the market in 2027.
That's how expensive Apple stock is
A lot now also depends on the new CEO John Ternus - after all, he was previously responsible for the hardware at Apple. However, it has to justify an ambitious valuation on the stock market: Apple is valued at more than 30 times expected earnings.
For comparison: the average in the market-wide S&P 500 stock index is only around 20 times. At the same time, according to the Wall Street Journal, Apple's profits are growing more slowly than the profits of the overall market. “Apple shares are very expensive,” says Schulte from MainSky Asset Management. In this respect, Apple must now continue to deliver in order to justify this high rating.
High valuation as the biggest price risk?
Investment strategist Kemper from BNP Paribas sees the high valuation as the greatest risk for the stock in the short term: "If the market begins to doubt that the strength of the Apple ecosystem and the high share buybacks justify this valuation, this could have a significant impact on the price."
For Apple, it's about more than new devices. The company must show that new hardware and artificial intelligence can also lead to new growth. After the extraordinary stock market rally of the past few years, the bar is higher than ever.
