1 Metric That Highlights Apple's Focus on AI
Key Points
Apple isn’t spending the money on artificial intelligence that its peers are, but that doesn’t mean it has completely ignored the trend.
The primary objective is to drive higher product and service revenue, which strengthens the company’s ecosystem.
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It was encouraging to learn that Apple (NASDAQ: AAPL) plans to launch a revamped version of Siri -- its virtual assistant powered by artificial intelligence (AI) -- later this year. However, the market still views the consumer technology company as an afterthought in the AI race, especially since its peers are spending so much money to expand their technical infrastructure.
But Apple isn't ignoring the trend. Here's one metric showing that it's definitely focused on AI.
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During its fiscal 2026 second quarter (ended March 28), the company reported year-over-year revenue growth of 16.6%. This was the fastest top-line gain since the 2021 fourth quarter.
The company's research and development (R&D) expenses soared at a faster clip, rising 33.6% in the second quarter compared to the same period last year. This isn't a new occurrence, but spending is accelerating. Between fiscal 2020 and fiscal 2025, Apple's R&D expenses grew by 84.2%, while revenue was up 51.6%.
CEO Tim Cook, who will step down from his role in September, said this on the second-quarter earnings call in response to an analyst's question about Apple's AI investment strategy: "We are investing in products and services, and we see opportunities in both. We could not be more excited about how the future is playing out."
Chief financial officer Kevan Parekh added: "From the start, we have believed AI is a really important investment area for Apple, We are going to be doing that incrementally on top of what we normally invest in our product road map."
Apple's advantage comes from its more than 2.5 billion active devices scattered around the globe. Its incredible distribution means the company's AI strategy rests solely on its ability to drive greater product and service revenue, further strengthening its powerful ecosystem.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
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