We recently published a list of Top 10 Stocks to Watch as AI Trade Dynamics Change. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other top stocks to watch as AI trade dynamics change.
Aswath Damodaran from NYU Stern School of Business said in a recent program on CNBC that AI “buzzwords” are not boosting the market anymore as investors grow more concerned about capital spending.
“I’ve said about data centers we’ve gotten way ahead of the game. I mean, the AI product and service business, which ultimately is what has to pay for all of this, has not taken off in any substantial way. I’m hard-pressed to think about any company making significant money from the AI product and service business.”
Damodaran said that the “sobering” of the AI trade started in September last year and the DeepSeek breakthrough in China also had an impact on the industry.
“It’s part of, I think, what you see almost every buzzword in history in the last four decades. I call these the ‘bar mitzvah moment,’ where people wake up and say, ‘Okay, there’s a lot of promise here, but show me something that I can hang my hat on.’”
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For this article, we picked 10 stocks Wall Street analysts have been talking about lately. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 158
Jim Cramer in a latest program on CNBC commented on a recent bullish note on Apple Inc. (NASDAQ:AAPL) from Evercore, agreeing with the firm. Cramer thinks the selloff after Apple Inc’s (NASDAQ:AAPL) delay of the Siri update was overblown.
“Evercore comes out and says, “All right, you ready? They’re taking the price target from 260 to 275.” In other words, a different direction from what the stock has been selling. A lot of shorts in the name. Why are they short? Because Apple doesn’t have a strategy, but also because it’s still got the high multiple. People feel that the quarter is going to be weak. I’m going to go with the Evercore view because it’s about free cash flow, it’s about return to shareholders, and David, I think this is another one of these pieces that just says enough with the Siri gate. There was nothing strange about AI. It’s going to be a slower rollout. When you talk to the people who work at Apple, particularly someone by the name of Tim Cook, they don’t like to release things unless they’re good. And are they happy that they don’t have the best AI yet? Well, of course. Look, they’re a company that prides themselves in professionalism.So, I actually like this piece.”
Evercore ISI believes Apple Inc. (NASDAQ:AAPL) is “well positioned” to have double-digit earnings growth through 2029.
“While investors over index on iPhone growth, we think there is less of a focus on AAPL’s ability to keep growing EPS & FCF growth consistently via gross margin (mix and pricing), operating leverage and buybacks,” analyst Amit Daryanani wrote in a note to clients. “Furthermore, AAPL is positioned to benefit from AI monetization without having to invest their FCF into GPUs, we see monetization occurring on multiple fronts over time.”
Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company’s new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.”
Overall, AAPL ranks 5th on our list of top stocks to watch as AI trade dynamics change. While we acknowledge the potential of AAPL, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.