Apple Inc (NASDAQ:AAPL) stock gained almost 3% on Wednesday as buyers lean into large-cap strength despite a softer tape in Technology. The Nasdaq is up 0.13% while the S&P 500 has gained 0.53%, even as the Technology sector is down 0.6%.
The Big Tech giant is balancing regulatory changes in Europe, shifting investor enthusiasm around artificial intelligence and rising hardware costs as investors weigh near-term pressures against the company’s potential to build a stronger personalized AI business.
Apple Overhauls EU App Store Terms
Apple agreed to change its European App Store policies to address its dispute with EU regulators. Starting Oct. 1, the company will replace its Core Technology Fee with a 5% commission on digital transactions made outside the App Store, lower its standard European in-app purchase commission to 26% and allow developers to offer alternative payment options.
AI Rotation Pressures Apple Shares
Apple shares have fallen roughly 10% since reaching a record on July 28 as investors shifted back toward companies more directly exposed to AI infrastructure spending.
Russell Investments senior portfolio manager Jordan McCall told Bloomberg that renewed confidence in AI capital spending has encouraged that rotation.
Prime Capital Financial portfolio manager Clayton Allison said Apple benefited when investors questioned heavy AI spending, but its limited infrastructure investment now gives it less exposure to the renewed AI rally. Allison still favors Apple’s balance sheet, ecosystem and share buybacks.
Jefferies analyst Edison Lee remains more cautious, pointing to higher memory costs and the risk that an expensive foldable iPhone could attract only a niche audience.
Munster Sees Siri as Apple’s AI Opening
Deepwater Asset Management Managing Partner Gene Munster told CNBC that he views Apple as an underappreciated AI opportunity. He believes the company’s more conservative approach to AI and stronger safeguards could differentiate it from more aggressive competitors.
He called Apple “one of the biggest underappreciated companies” among mega-caps, saying the company has “finally got it right” with Siri and could see its shares “re-rated” as the assistant becomes a foundation for personalized AI.
Munster said his testing of the Siri beta convinced him that Apple has made meaningful progress. Deepwater research shows fewer than 20% of U.S. iPhone owners use Siri daily, giving Apple significant room to expand adoption.
Munster believes Siri could become the foundation of Apple’s personalized AI strategy. He expects Apple’s valuation multiple to rise meaningfully over the next year as investors gain more confidence in its AI direction, even if earnings growth improves only modestly.
Apple trades at a price-to-earnings ratio of about 35.6, reflecting a premium valuation. The stock carries a Buy consensus rating with an average price forecast of $329.53.
Jefferies downgraded Apple to Underperform on Aug. 10 and lowered its price forecast to $263.66. China Renaissance downgraded the stock to Hold on Aug. 4 with a $280 price forecast. JPMorgan maintained an Overweight rating on July 31 but lowered its price forecast to $340.
Top ETF Exposure
- Columbia Research Enhanced Core Premium Income ETF (NYSE:RECI): 9.96% Weight
- iShares S&P 100 ETF (NYSE:OEF): 9.83% Weight
- Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE:USNZ): 9.57% Weight
Significance: Because AAPL carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Price Action
AAPL Stock Price Activity: Apple shares were up 2.88% at $318.96 at the time of publication on Wednesday, according to Benzinga Pro data.
Image via Shutterstock
