Apple’s stock (NASDAQ: AAPL) has surged 22% in 2026, trading at record highs as of July 20, thanks to its measured approach to artificial intelligence (AI) spending. Despite the tech industry’s frenzy over AI capital expenditures, Apple spent only $4.3 billion on capex in the first half of fiscal 2026, facilitating robust free cash flow and a 16.6% year-over-year revenue growth in Q2 2026.
However, Apple’s current price-to-earnings ratio of 39.5 is near an 18-year high, suggesting heightened investor enthusiasm and potential downside risk for shareholders. With earnings per share increasing by 21.8%, analysts advise caution, recommending that investors keep Apple on their watchlist but wait for a more favorable valuation before purchasing shares.
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