Apple $AAPL slid sharply after a broader tech selloff, posting its worst single-day decline in months and underperforming most of its Big Tech peers. Unlike rivals pouring hundreds of billions into AI infrastructure, Apple has actually reduced capital spending and remains less exposed to fears of runaway AI costs. The company even delivered its best quarter ever without a fully developed AI product.
That’s precisely what has investors uneasy. Apple isn’t being punished for overspending on AI. It’s being punished for not delivering enough of it.
Behind in the AI race
Earlier this year, Apple said it would integrate Google $GOOGL’s Gemini model to boost AI capabilities on iPhones, a strategy designed to leapfrog development costs by partnering rather than building everything in-house. But repeated delays to key AI features, including fresh reports that major upgrades are being pushed back again, have raised doubts about execution.
Investors increasingly fear Apple could fall behind competitors that are embedding AI deeply into products and services today. The concern isn’t that Apple lacks resources. It’s that its rollout has been slow and uncertain.
The monetization promise still hangs in the air
Analysts believe successful AI features could unlock massive value, potentially adding tens of billions to Apple’s business and significantly boosting its stock price over time. But so far, there’s little tangible evidence of near-term revenue impact.
Meanwhile, retail investors appear to be losing patience. Apple has become the most sold stock among individual traders this year, with net outflows far exceeding any other major company. That behavior suggests the market is reacting to momentum, not fundamentals.
For a company long defined by flawless execution and category-defining products, the current narrative is uncomfortable: Apple may not be losing the AI war because it spent too much. It may be losing because it hasn’t moved fast enough.