Is Apple Stock Back to Being a Market Leader?

Apple's (NASDAQ: AAPL) business has been in a bit of a lull over the past few years. There were questions surrounding its AI strategy (there still are), and its ability to sell more products. Its revenues have ranged from mid-single-digit percentage growth to actual contraction, and investors started to question whether it had lost its status as a market leader.

Over the past few months, though, Apple's stock has rallied, causing it to potentially regain market-leading status. But will this upswing persist?

Image source: Apple.

Apple's lack of AI spending is attractive to some investors

Apple's business is fairly easy to comprehend. It sells consumer tech that's simple to use. That simplicity has helped make it the most popular tech brand in the U.S., and it has created a loyal user base. However, that loyalty has come into question over recent years as its competitors have launched several AI features for their smartphones that the iPhone doesn't have. While this hasn't led to a mass exodus from Apple's ecosystem yet, there could come a day when a game-changing feature is debuted that causes that to occur.

However, Apple's far lower AI-related spending is actually what may make it an attractive option in this market. The AI sector's momentum flagged in August 2025, and it's still facing headwinds. Nvidia (NASDAQ: NVDA), the most popular AI stock, has gained a mere 5.5% since then, while Apple is up almost 30%.

This shows that investors may be looking for safe-haven investments that are less exposed to AI-related spending -- and Apple's capital expenditures have stayed low while those of its big tech peers have exploded.

MSFT Capital Expenditures (TTM) data by YCharts.

Some investors today feel far more comfortable investing in a known business like Apple than they do investing in some of the hyperscalers that are transforming into AI-first operations. While this strategy may work out for these companies, it could also be a flop, wasting tens or hundreds of billions of dollars. However, if generative AI is all that these companies expect it to be and more, Apple could be in a rough spot, as it may eventually need to rent out computing capacity from other companies to run its own AI models.

Time will tell which approach is right. But right now, the market is saying with its dollars that it prefers the more tame approach to AI that Apple is taking. As a result, it has reclaimed second place on the list of the world's largest companies.

I think Apple's strategy is risky and has a huge chance of flopping, which is why I'm hesitant to call it a market leader. I think it's more of a market alternative, and it could be a few years before we know how well this alternative investment strategy will work out.

Keithen Drury has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.