Apple’s Low-Cost AI Strategy Wins Over Investors, Despite Risks
Anyone looking at Apple’s recent stock rally—which lifted its market capitalization to $3.6 trillion two weeks ago, a record for any public company—wouldn’t know that the company’s big new product, the Vision Pro mixed reality headset, had sold so badly that Apple is scaling back production. Or that it’s been slow to introduce artificial intelligence features to its products, with the first coming this week. Or that sales of Apple’s most important product, the iPhone, haven’t grown in nearly two years.
Apple stock has long traded as a world unto itself. Ahead of this week’s spate of tech earnings, investors are paying more for Apple shares, as a multiple of next year’s profits, than they are for either Meta Platforms or Google parent Alphabet and about as much as they’re paying for Microsoft. And yet Apple’s profits are expected to grow by just 26% between 2023 and 2026, while Microsoft, Google and Meta are respectively expected to lift their profits 57%, 63% and 85% over the same period, according to data from S&P Global Market Intelligence.
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