Market badly hit! Wall Street begins to question the massive arms race, Apple Inc. (AAPL.US) becomes a "anti-AI" safe haven.

Note that earlier this year, Apple Inc.(AAPL.US) stock suffered significant losses due to criticism over the lack of artificial intelligence strategy by this iPhone manufacturer. However, as AI trading faces more scrutiny, this hesitation has transformed from a weakness to a strength - this is reflected in the stock market. In the first half of 2025, Apple Inc. performed second worst among the "Big Seven" stocks, with its stock price plummeting by 18% by the end of June. However, since then, the situation has reversed, with Apple Inc.'s stock price soaring by 35%, while AI darlings like Meta platform and Microsoft Corporation have seen declines, even Nvidia Corporation's performance pales in comparison. During the same period, the S&P 500 rose by 10%, and the Nasdaq 100 index, which has a high weighting of tech stocks, rose by 13%. John Ball, fund manager of Needham Aggressive Growth Fund, who holds Apple Inc. stocks, says, "When all peers are moving in the opposite direction, being able to keep a clear head and control expenses is very impressive." Since the end of June, Apple Inc.'s performance has outperformed the S&P 500 index and Nvidia Corporation. As a result, Apple Inc.'s current market value has reached $4.1 trillion, ranking second in the S&P 500 index, surpassing Microsoft Corporation and nearing Nvidia Corporation. This shift reflects the market's skepticism about large tech companies investing billions in AI research and Apple Inc.'s positioning for eventually benefiting from mass adoption after technology matures. Bill Stone, Chief Investment Officer of Glenview Trust Company, holds Apple Inc. and considers it a "mildly anti-AI position." He says, "While they will certainly integrate more AI into their phones over time, Apple Inc. has avoided the AI arms race and the accompanying massive capital expenditures." Of course, this rally has brought Apple Inc.'s stock to a high point seen in a long time. The stock currently trades at 33 times expected earnings for the next 12 months, a level that has only happened a few times in the past 15 years, with the highest being 35 times in September 2020. The stock's average P/E in this period is less than 19 times. Apple Inc. is now the second most expensive stock in the "Big Seven" index, surpassed only by Tesla, Inc. with an astonishing 203 times forward P/E ratio. Craig Moffett, co-founder of research firm MoffettNathanson, says, "It's hard to see how the stock can continue to compound growth in value at these levels, making it an attractive entry point." He adds, "The obvious question is whether investors are paying too much for Apple Inc.'s defensive positioning. We think they are." Notably, Warren Buffett's Berkshire Hathaway reduced its stake in Apple Inc. by 15% in the third quarter, while establishing positions in the latest hot AI concept stock Alphabet (GOOGL.US). However, in terms of market value, Apple Inc. remains the largest holding in Berkshire's stock portfolio. From a technical perspective, Jonathan Krinsky, Chief Market Technician at BTIG, wrote in a report to clients last week that based on the extent to which Apple Inc.'s stock price exceeded its 200-day moving average, it appears "primed for a decline, particularly as we look towards January." However, he believes, "the long-term trend for Apple Inc. remains undoubtedly bullish." With increasing skepticism about AI, it is easy to understand the enthusiasm of investors behind Apple Inc. As this technology becomes mainstream and profitable, millions of users may access it through Apple Inc. products, driving demand for their devices and accelerating the growth of their high-profit services business. Furthermore, at a time when Wall Street is uneasy about the massive capital expenditures involved in AI research, Apple Inc. has positioned itself favorably without having to make all of these expenditures. Moffett says, "The stock is expensive, but Apple Inc.'s consumer franchise is unshakable." He adds, "In a time when there are legitimate concerns about whether AI is a bubble, Apple Inc. is seen as a safe haven, which is understandable."