Apple Is Mostly Sitting Out the AI Spending Arms Race. With AI Stocks Selling Off, That Suddenly Looks Smart.

Key Points

• Apple’s capital expenditures totaled about $12.7 billion in fiscal 2025, a fraction of its mega-cap peers’ spending.

• The company announced a new $100 billion share repurchase program in April.

• AI infrastructure stocks have sold off this month on spending and financing concerns.

• 10 stocks we like better than Apple ›

Some of the technology world’s biggest spenders had a rough week. Oracle sank by a double-digit percentage after pairing record quarterly results with plans to raise tens of billions of dollars in additional financing for its artificial intelligence (AI) data center build-out. Chip stocks fell hard, too, as investors questioned when all of this spending starts paying for itself.

Some investors may think the best way to diversify away from these AI companies is to venture beyond tech. But I actually think one of tech’s biggest names offers some good balance to stocks like this. I’m talking bout the $4.3 trillion iPhone-maker: Apple (NASDAQ: AAPL).

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Apple has been flagged by some investors in recent years as behind “behind” on AI as other tech giants spend far more to capitalize on opportunities in the AI era. But what if this is actually a strength?

Image source: Getty Images.

A spending gap in the hundreds of billions

Apple’s capital expenditures in fiscal 2025 (the period ended Sept. 27, 2025) totaled about $12.7 billion. Its mega-cap peers — Microsoft, Alphabet, Meta Platforms, and Amazon — combined to spend more than $400 billion on the same line item in calendar 2025.

And the gap is set to widen. Amazon alone expects its capital spending to reach about $200 billion this year — about 16 times what Apple spent in its most recent fiscal year.

But this doesn’t mean Apple is ignoring AI. The company is simply approaching it differently. At its developers conference on Monday, Apple unveiled its long-awaited Siri overhaul, powered by Alphabet’s Gemini models under a partnership that reportedly costs about $1 billion per year, with the new software arriving this fall. Additionally, Apple’s AI effort seems to run largely through its operating budget: research and development spending was $34.6 billion in fiscal 2025 — nearly three times its capital expenditures — and it climbed 33% year over year in the company’s most recent quarter.

And while peers borrow to build, Apple keeps handing cash back to shareholders. Alongside its fiscal second-quarter results in April (the period ended March 28, 2026), the company announced a new $100 billion share repurchase authorization and raised its dividend 4%. The quarter itself was Apple’s best March quarter ever, with revenue climbing 17% year over year to $111.2 billion and earnings per share jumping 22%.

“Our strong business performance during the March quarter generated over $28 billion in operating cash flow and drove new March quarter records for both operating cash flow and EPS,” said Apple chief financial officer Kevan Parekh in the company’s fiscal second-quarter earnings release.

In other words, the cash that rivals are pouring into data centers is, at Apple, still flowing to shareholders.

The case against patience

Of course, there’s a less flattering version of this story.

Apple’s revamped Siri runs on models built by a direct rival rather than on technology Apple owns. If AI assistants become the main way people interact with their devices, depending on Alphabet for that critical layer could prove costly. The rival, in effect, now sits inside the product Apple’s customers talk to.

And the stakes are enormous. Apple’s installed base has surpassed 2.5 billion active devices. That base is a key part of the company’s moat — and it’s also what could erode if a competitor’s assistant becomes the one consumers actually prefer.

What to watch

Investors should watch two things from here.

The first is how quickly users embrace the new Siri once it ships this fall. This could be revealed in any management commentary in the first quarterlyearnings callfollowing the release of Siri AI.

The second main factor to watch is whether iPhone and services momentum holds up in the upcoming quarterly reports. Sustained double-digit growth in both iPhone and services revenue would suggest customers are buying into Apple’s AI strategy.

For now, I think the past week strengthens Apple’s case.

Restraint can look like timidity when AI infrastructure stocks are soaring. But when the market starts questioning the spenders’ debt loads and cash burn, that same restraint starts to look like discipline. Sure, Apple may still need to prove it can deliver great AI experiences. But isn’t letting someone else shoulder hundreds of billions in spending — while you keep the customer relationship — the kind of position most businesses dream of?

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Daniel Sparks and his clients have positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.