As the tech industry pours billions into artificial intelligence, a notable divergence is emerging within the “Magnificent Seven” group of leading companies. Although some are aggressively increasing capital expenditure (capex) to build AI infrastructure, Apple is taking a different approach, and investors are taking notice. The iPhone maker’s strategy of leveraging partnerships, like its recent collaboration with Google’s Gemini, and prioritizing buybacks is positioning it as a potentially safer bet should the current AI investment boom falter.
Apple’s comparatively restrained spending on AI is attracting renewed Wall Street confidence. The company’s $12.7 billion capex in 2025 stands in stark contrast to the projected $115–$135 billion Meta anticipates spending in 2026, according to analysts. This difference has led some to view Apple as a “safe haven” for investors concerned about the escalating costs and uncertain returns associated with the AI race.
The shift in sentiment was evident on Tuesday, February 17, 2026, when Apple stock jumped 3.2%, outperforming all other Magnificent Seven stocks. This gain came as investors reassessed their positions, moving away from companies with heavy AI spending commitments. The Roundhill Magnificent Seven ETF has slid 11% from its record close on October 29, while Apple is up 7.9% over the same 12-month period, beating Microsoft, Amazon, and Meta.
Apple’s strategy centers around integrating AI capabilities through partnerships rather than building extensive in-house infrastructure. The recent agreement to utilize Alphabet’s Gemini to power Siri and other Apple Intelligence features is a prime example of this approach. This move, described by Wedbush analysts as a “major validation moment” for Google’s AI efforts, allows Apple to access cutting-edge AI technology without the massive capital outlay required for independent development. Investopedia reports that this partnership is a key factor in the renewed investor interest.
The AI Capex Landscape
The broader trend reveals a significant disparity in AI spending among the tech giants. Microsoft, Alphabet, Amazon, and Meta are collectively projected to spend a combined $650 billion on capex this year, a figure that highlights the intense competition and investment in the AI space. Although, this level of spending is raising concerns about the potential for diminishing returns, as companies grapple with translating massive investments into tangible profits. “One of the reasons people loved investing in megacap technology was these are earnings and cash flow generating machines,” said Steve Sosnick, chief strategist at Interactive Brokers. “Well, this AI spend is changing that dramatically. It’s sopping up a lot of that free cash flow.”
Apple, in contrast, is maintaining a more conservative approach, with its 2026 capex forecast at just $12.9 billion – a fraction of its competitors’ investments. This strategy is appealing to investors who are seeking stability and predictability in a rapidly evolving market. Ryuta Makino, research analyst at Gabelli Funds, noted that Apple is being viewed as “a safe haven against this big AI spending story, just because their capex is relatively low compared to other hyperscalers.”
Gemini Partnership and Market Confidence
The Google Gemini partnership isn’t just about cost savings; it’s also a signal of Apple’s confidence in Alphabet’s AI capabilities. Alphabet’s Gemini 3 model is currently ranked highly on crowdsourced review platform LMArena, suggesting that Apple is aligning itself with a leading AI innovator. The Motley Fool highlights this as a strategic move, leveraging the strengths of another tech powerhouse to enhance its own AI offerings.
Despite criticism for initially lagging in the AI race, Apple’s approach appears to be resonating with investors. The company’s ability to integrate AI features without incurring massive capital expenses is seen as a competitive advantage. Wedbush analyst Dan Ives has a $350 price target for Apple stock, approximately 33% above current levels, reflecting the growing optimism surrounding the company’s AI strategy. Parameter.io details this analyst outlook.
As the AI landscape continues to evolve, Apple’s strategy of strategic partnerships and disciplined capital allocation may prove to be a winning formula. The company’s focus on maintaining profitability while integrating AI capabilities positions it as a potentially resilient player in the face of increasing investment and uncertainty. The coming quarters will be crucial in determining whether this approach can sustain Apple’s momentum and solidify its position as a leader in the tech industry.
What remains to be seen is how effectively Apple can leverage these partnerships to deliver innovative AI-powered products and services. Investors will be closely watching the company’s progress in integrating Gemini and other AI technologies into its ecosystem, as well as its ability to maintain its financial discipline in the face of ongoing competitive pressures. Share your thoughts in the comments below.
