How Apple Is Winning the AI Race -- by Staying Out of It

It wasn't long ago that Apple (NASDAQ: AAPL) was being criticized by tech industry commentators for not having a successful AI strategy. While companies like Microsoft and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) invested heavily in AI infrastructure and launched buzzy new AI products like Copilot and Gemini, Apple's AI-powered Siri update was delayed until 2026, and its Apple Intelligence offerings got underwhelming reviews.

For much of 2025, investors worried that Apple was getting left behind in the AI race. But as we begin 2026, it looks like Apple is in a stronger position than many of its peers.

Instead of heavily investing in data center infrastructure or rushing to put out AI products, Apple might have found a better approach to the AI race -- by waiting it out.

AI stocks are getting hit hard in 2026

For the past few years, AI stocks have been some of the hottest in the world. But recently, investor sentiment seems to be shifting. Some technology stocks are getting higher levels of scrutiny from investors. Market participants are questioning the high capex outlays they are devoting to building AI data centers, worrying about excessive valuations, and wondering if the AI products that run on all that hardware will ever be profitable enough to recoup the upfront costs.

During the past six months, Apple has outperformed major AI stocks like Amazon, CoreWeave, Meta Platforms, Microsoft, Nvidia, and Oracle. Indeed, the share prices of Amazon, Microsoft, and Alphabet recently dropped immediately after they delivered their latest quarterly reports, which featured strong earnings, but also announcements of big new capital expenditure plans. On Feb. 4, for instance, Alphabet announced that its 2026 capex investments would be in the range of $175 billion to $185 billion. In its fiscal 2025, Apple's capital expenditures were only $12.7 billion.

NVDA data by YCharts

It's too soon to say that AI is in a bubble that is bursting. The stocks leading the sector might recover, and all those capital expenditures might prove to be worthwhile. But Apple seems to be offering investors a place of relative safety in a turbulent tech market in 2026.

Apple is partnering with Google for AI

Along with avoiding big AI capex outlays, Apple seems to be following a collaborative AI strategy. On Jan. 12, Apple and Google announced a new partnership. Apple intends to use Google's Gemini AI technology as the foundation for Apple Foundation Models. The companies said that Google's Gemini models and cloud technology "will help power future Apple Intelligence features, including a more personalized Siri coming this year."

Image source: Getty Images.

Partnering with Google is a savvy move. Its Gemini AI is widely viewed as industry-leading technology, and features some of the best-performing AI models. Instead of incurring the upfront capex costs and financial risks of building its own data centers and large language models, Apple might be better off building its AI features upon Google's base.

On Jan. 29, Apple reported record-setting results for the first quarter of its fiscal 2026. The company had $143.8 billion in revenue (up 16% year over year), with the iPhone achieving a 23% increase in net sales year over year. Apple seems ready to move beyond the market's previous concerns about its AI approach. The company's future looks bright, and this stock looks like a buy.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool has a disclosure policy.