Apple Inc. (NASDAQ:AAPL) is one of Cramer’s favorite stocks. The shares are up by 35.8% over the past year and by 14% year-to-date. In 2026, the consumer electronics giant has suffered from the ongoing shortage in the memory industry due to the AI data center buildouts. The shortage forced Apple Inc. (NASDAQ:AAPL) to raise prices earlier this year, and media reports have also suggested that it is eager to buy memory chips from Chinese firm CXMT. On August 17th, Cramer lamented the impact of these problems on Apple Inc. (NASDAQ:AAPL)’s shares:
“Apple has Tim Cook in Texas opening still one more manufacturing, American manufacturing program. Putting one more, and Tim’s almost done. And you know what do they do, they get hammered for who, where they’re going to buy memory. When memory by the way, let’s remember that, memory is the most jacked up price. And everyone is supposed to just pay the price. You know Meta’s in there buying it, and Google’s in there buying it. And Tim Cook’s trying to keep the price of a phone down. And no? In the meantime, he’s opening incredible job seeking ways, of getting people involved.”
For Apple Inc. (NASDAQ:AAPL), the primary debate about the company always surrounds its sizable user base. In today’s AI era, the bulls and the bears have been divided on whether the firm’s AI initiatives will be able to usher in a new replacement cycle for Apple Inc. (NASDAQ:AAPL)’s hardware devices, such as the iPhone. Additionally, the firm’s current financials also paint a strong picture. In its June quarter, Apple Inc. (NASDAQ:AAPL) reported that iPhone revenue jumped by 21% to $54 billion, while its revenue jumped 16.4% to $109 billion.
Additionally, and as Cramer has pointed out before, Apple Inc. (NASDAQ:AAPL) has managed this growth despite keeping its capital expenditures at a modest $11 billion annually. At the same time, the firm’s Services business, which blossomed under Tim Cook, might be finally running out of steam. During the latest quarter, Apple Inc. (NASDAQ:AAPL)’s Services business brought $30.7 billion in revenue, which missed analyst estimates of $31.2 billion. Additionally, iPad revenue also dipped by 5.9% to $6.1 billion and missed $6.9 billion in estimates. The weakness in Services and iPad revenue, coupled with a weakness in the wearables business means that Apple Inc. (NASDAQ:AAPL) might become highly dependent on the iPhone for growth.
On the hedge fund front, sentiment hasn’t shifted much. In Q4, 169 funds tracked by Insider Monkey had held a stake while the figure was 170 in Q1. Apple Inc. (NASDAQ:AAPL)’s forward price to earnings multiple of 32 is at the high end of its ten year range. Short interest as a percentage of the float is negligible and stood at 0.97% as of July end.
While Insider Monkey acknowledges the risk and potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AAPL that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: Jim Cramer Draws the Line on NVIDIA in China: Why National Security Comes First and Jim Cramer Defends His Dell Stance as Investors Complain About Missing Out.
Disclosure: None.
