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But as the AI trade faces increasing scrutiny, that hesitance has gone from a weakness to a strength -- and it's showing up in the stock market. Through the first six months of 2025, Apple was the second-worst performer among the Magnificent Seven tech giants, as its shares tumbled 18% through the end of June. That has reversed since then, with the stock soaring 35%, while AI darlings like Meta Platforms Inc. and Microsoft Corp. slid into the red and even Nvidia Corp. underperformed. The S&P 500 Index rose 10% in that time, and the tech-heavy Nasdaq 100 Index gained 13%. Most Read from Bloomberg * NJ's Montclair Cuts School Staff and Mulls March Tax-Hike Vote * A Bright Idea for Road Safety: Traffic Light Timing * Trump Replaces Architect to Lead $300 Million Ballroom Design * Owner of NYC's Fordham Landing Housing Project Files Bankruptcy * Democrats Want Probe of Trump Officials and Immigration Deals "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," said John Barr, portfolio manager of the Needham Aggressive Growth Fund, which owns Apple shares. As a result, Apple now has a $4.1 trillion market capitalization and the second biggest weight in the S&P 500, leaping over Microsoft and closing in on Nvidia. The shift reflects the market's questioning of the hundreds of billions of dollars Big Tech firms are throwing at AI development, as well as Apple's positioning to eventually benefit when the technology is ready for mass use. "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," said Bill Stone, chief investment officer at Glenview Trust Company, who owns the stock and views it as "a bit of an anti-AI holding." Of course, the rally has made Apple's stock pricier than it has been in a long time. The shares are trading for around 33 times expected earnings over the next 12 months, a level they've only hit a few times in the past 15 years, with a high of 35 in September 2020. The stock's average multiple over that time is less than 19 times. Apple is now the second most expensive stock in the Bloomberg Magnificent Seven Index, trailing only Tesla Inc.'s whopping valuation of 203 times forward earnings. Apple's shares climbed about 0.5% in early Tuesday trading. "It's really hard to see how the stock can continue to compound value at a level that makes this a compelling entry point," said Craig Moffett, co-founder of research firm MoffettNathanson. "The obvious question is, are investors overpaying for Apple's defensiveness? We think so." Story Continues Notably, Warren Buffett's Berkshire Hathaway Inc. trimmed its Apple stake by 15% in the third quarter, while building a position in the latest hot AI play, Alphabet Inc. However, Apple remains the biggest position in Berkshire's equity portfolio by market value. From a technical perspective, Apple's stock price appears "poised for a drop, especially as we look ahead to January" based on the degree to which it's exceeding its 200-day moving average, BTIG's chief market technician Jonathan Krinsky wrote in a note to clients last week. However, he believes that "the long-term trend for AAPL remains unquestionably bullish." The logic behind the investor enthusiasm for Apple as AI questions mount is easy to see. As the technology goes mainstream and becomes profitable, millions of users are likely to access it through Apple products, driving demand for its devices and accelerating its high-margin services business. Plus, as Wall Street gets squeamish about the massive amount of capital expenditures being dedicated to developing AI, Apple already has this position without all the spending. "The stock is expensive, but Apple's consumer franchise is unassailable," Moffett said. "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." Top Tech Stories * President Donald Trump granted Nvidia Corp. permission to ship its H200 artificial intelligence chip to China in exchange for a 25% surcharge, a move that lets the world's most valuable company potentially regain billions of dollars in lost business from a key global market. * Paramount Skydance Corp. launched a hostile takeover bid for Warner Bros. Discovery Inc. at $30 a share in cash on Monday, just days after the company agreed to a deal with Netflix Inc. The offer values Warner Bros. at $108.4 billion, including debt. * Reddit Inc. is launching new safety features globally for all under-18s on its popular online forums ahead of Australia's groundbreaking social media ban. * The head of India's biggest quick commerce player says the sector is hurtling toward a shakeout as rivals' cash dries up, but that his startup will thrive -- and continue its expansion. * Microsoft Corp.'s chief Satya Nadella this week becomes the latest tech leader to visit India, joining a procession of industry bigwigs seeking to court a potentially massive market and use the world's most populous country as a proving ground for AI. Earnings Due Tuesday * No major earnings expected --With assistance from Subrat Patnaik and Stephen Kirkland. (Updates share trading.) Most Read from Bloomberg Businessweek * Why a College Fighting for Survival Is Slashing Econ and Physics Majors * Argentina's Richest Man: 'Real Power Is Choosing When to Step Away' * Netflix Has a Huge Opportunity With the DC Studios Superheroes * YouTube Creators Find a New Consumer for AI Slop: Babies * How Trump Pushed US Park Rangers to the Breaking Point--and a Union Drive (c)2025 Bloomberg L.P. View Comments Terms and Privacy Policy Privacy Dashboard More Info --------------------------------------------------------------------- * * * * * * * Recommended Stories Copyright (c) 2025 Yahoo. All rights reserved. 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