Apple Inc.’s status as an anti-artificial intelligence play helped the stock tear through the first half of the year as investors grew skeptical of the AI trade. But that sentiment has flipped, and the shares are struggling.
Since closing at a record high on July 28, Apple shares have fallen 10% following the iPhone maker’s disappointing earnings. In addition, investors rotated back into perceived AI winners as results from Microsoft Corp., Amazon.com Inc. and Alphabet Inc. assuaged fears about overspending on the technology and sent the shares of the biggest AI spenders higher, along with chipmakers and other beneficiaries of those investments.
“It makes sense that Apple isn’t going to trade on a one-to-one basis with the AI infrastructure supply chain, and that there are going to be times when that inverse correlation hurts them,” said Clayton Allison, portfolio manager at Prime Capital Financial, which has about $50 billion in assets and holds Apple shares. “Not spending looks smart when you’re worried about spending, but now that the AI trade is going strong, we can’t say that it’s reaping the rewards the others are.”
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