Apple Sidesteps AI Spend Bubble So I Keep Buying

I support buying Apple (NASDAQ:AAPL), and the much I work astir what its Magnificent Seven peers are spending connected AI, the harder my condemnation gets. Every 4th I look astatine what this institution really does with the currency a telephone concern throws off, and I adhd to the presumption again.

Here is what pulls maine backmost to the bargain button. Apple sells hardware and bundle that hundreds of millions of radical already usage each day, and it turns that installed basal into recurring cash. 2.5B+ progressive devices is the moat. Apple monetizes quality done the phones and Macs already sitting connected desks, truthful it does not request to physique a information halfway empire to warrant an AI story.

The Receipts

Three information points anchor the position. First, currency generation. Full fiscal 2025 gross was $416.16B, nett income was $112.01B, and operating currency travel reached $111.48B. Buybacks unsocial consumed $90.71B of that. Q2 FY26 layered connected $111.18B successful gross (up 16.6% YoY), EPS of $2.01 beating by 3.59% (the 8th consecutive 4th of beating expectations), a caller $100B buyback authorization, and a 4% dividend rise to $0.27 per quarter.

Second, the equilibrium sheet. Return connected equity of 171.42%, instrumentality connected invested superior of 53.35%, operating borderline of 31.97%, and $147 cardinal successful currency and marketable securities against $85 cardinal successful debt. Third, capex discipline. Apple's afloat FY25 capex was $12.7B, and Q1 FY26 capex ran $2.37B, down 19.29% YoY.

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Why Not Microsoft oregon Alphabet

Those are the 2 names a scholar reaches for archetypal erstwhile they deliberation "AI winner." Both beryllium wrong the hyperscaler capex curve I privation to avoid. Vanguard's 2026 outlook projects AI scalers volition walk astir $2.1 trillion connected superior concern from Q1 2025 done Q4 2027. Goldman Sachs' 2026 outlook flags that hyperscaler capex positive buybacks and dividends person consumed ~95% of operating currency flows implicit the past 12 months vs ~80% successful 2019, forcing immoderate of them into recognition markets to support the instrumentality running. That is the trap I bash not privation status wealth exposed to.