$13 billion that seems to 'scream' Apple's AI strategy is not wrong

Tech stocks have been facing torrid days in the last few days. As Big Tech’s mega AI spending plans are spooking investors. So much so that Microsoft, Nvidia, Oracle, Meta, Amazon and Google-parent Alphabet -- all saw their shares fall last week.

Fears over AI spending sparked the sell-off that more than $1 trillion wiped from stocks of these companies, with Amazon leading the pack in losses. Amazon, Alphabet, Microsoft and Meta have together reported about $120 billion in capital expenditures or Capex in the fourth quarter alone. As per a report in Financial Times, this figure could exceed more than $660 billion this year, which is higher than the Gross Domestic Product (GDP) of countries like Singapore and Israel.An outlier here is Apple. iPhone-maker, who till weeks back, was being slammed for not being able to get its AI strategy right, with some even going to the extreme of asking for CEO Tim Cook's resignation over the same. The stock market too didn't seem very happy with Apple, as Apple stock underperformed over the past year due to its reputation for being an artificial-intelligence laggard. Shares of Apple rose 8% in 2025, lagging behind the broader S&P 500 index’s SPX -1.23% 16% gain.

More recently, Apple also received criticism for the partnership, with some analysts warning that Apple is making an unwise move in outsourcing its AI capabilities to Google. This after Apple Intelligence offerings got not-so-impressive reviews and Siri update was delayed until 2026.

How tide turned for Apple in AI

In an unexpected reversal of fortunes for the iPhone maker, Apple has so far managed to buck the trend. Apple was the only “Magnificent Seven” name in the Green last week, with its shares up more than 5% past week%.

So much so that Apple reclaimed the title of the second-largest company by market capitalization, after Alphabet last month pushed Apple out of that position. What seems to be working here is Apple’s more disciplined approach to AI spending.

Analysts says Apple's economical AI budget is coming in handy in a week when investors are scared of Big Tech's rising Capex. Here, Apple’s lower AI capital expenditure levels — the company is expected to spend $13 billion on capex in 2026 — have become an advantage.

This especially at a time when the spending patterns of Big Tech come under scrutiny.For much of 2025, investors worried that Apple was getting left behind in the AI race. But as we begin 2026, it looks like Apple is in a stronger position than many of its peers. Shares of Apple may be benefiting as investors move money out of software stocks and look for new opportunities within the tech sector, Andrew Graham, founder and portfolio manager at Jackson Square Capital, told MarketWatch over email.

Apple is a “software/hardware hybrid where the sum may be worth more than its parts,” Graham said.

Apple and Google's AI partnership

Apple is following a collaborative AI strategy. Last month, Apple and Google announced a new partnership. Apple intends to use Google's Gemini AI technology as the foundation for Apple Foundation Models. The companies said that Google's Gemini models and cloud technology "will help power future Apple Intelligence features, including a more personalized Siri coming this year."

For Apple, partnering with Google is a savvy move.

As a report in Motleyfool said, "Its Gemini AI is widely viewed as industry-leading technology, and features some of the best-performing AI models. Instead of incurring the upfront capex costs and financial risks of building its own data centers and large language models, Apple might be better off building its AI features upon Google's base."