Apple's AI Strategy Pays Off as Stock Price Surges

Apple's AI strategy has been criticized for being slow to adapt compared to its competitors. However, the company's non-capital-burning approach to AI may be a key factor in its recent stock price surge.

In contrast to Microsoft, Google, and Meta, which have invested heavily in large models and cloud infrastructure, Apple has chosen to partner with existing model vendors such as Google and Alibaba. This strategy allows Apple to leverage the computing power of its partners without bearing the costs of building and maintaining its own infrastructure.

According to data, Apple's capital expenditure on cash basis was around 10 billion U.S. dollars in the 12 months ending June 2026, a fraction of the investments made by other large tech companies such as Microsoft, Meta, Alphabet, and Amazon.

The market is shifting its focus from computing power scale to return on capital, with investors increasingly looking for companies that can generate revenue without breaking the bank. Apple's latest TTM free cash flow has risen to about 136.7 billion U.S. dollars, making it the only one among the five large tech companies that exceeds the historical high recorded between 2023 and 2025.