Apple’s stock has had a bumpy ride this year. But it’s been a lot more pleasant lately — so much so that shares posted their first record close in over a month during Thursday’s session. In doing so, Apple stands out among the rest of the “Magnificent Seven.” The other six members of the group — Amazon , Alphabet , Microsoft , Nvidia , Meta , and Tesla — are all well below their all-time closing highs. For some (Microsoft, Meta, and Tesla), you have to go all the way back to last year to find theirs. For the others (Amazon, Alphabet, and Nvidia), they topped out on various days in May before pulling back. Apple’s roughly 16.5% year-to-date gain is also the best of the bunch (only Microsoft and Tesla are in the red in 2026). So, what makes Apple the outlier among these trillion-dollar-plus giants? Despite a modest pullback on Friday, why is it near its highs while the other stocks stare up at theirs? The simple answer is that Wall Street is, finally, rewarding Apple for its low-cost approach to the artificial intelligence race. At the same time, the Street is rethinking how it values the other megacaps as customers prioritize efficient AI consumption, rather than a maximalist mindset. This shift from “tokenmaxxing” to token optimization — a token is the basic unit of AI computing — marks a new chapter in the generative AI boom, with clear ripple effects in the stock market. Just look at the chart of Apple. To fully appreciate the love for Apple, at a time of skepticism toward the other megacaps, we need to turn back the clock a few years. ChatGPT launched Nov. 30, 2022 The catalyst for this entire technology revolution was the launch of OpenAI’s ChatGPT in late 2022. While we’re oversimplifying a bit, in the wake of ChatGPT, Amazon, Google parent Alphabet, Meta Platforms, and Microsoft started spending tens of billions of dollars on more compute capacity and data centers, while also working on AI-infused products. At various points along the way, each faced some level of skepticism from Wall Street. But generally speaking, their spending was considered a good and necessary thing. And, since a lot of this money was being spent on Nvidia’s cutting-edge AI chips and networking gear, it was the biggest winner of them all. Apple was seen as late to the AI party. Perhaps its invitation got lost in the mail? It did not have a cloud-computing service receiving an influx of AI-related demand (unlike Amazon, Microsoft, and Google). It also had no large language model (LLM), the underlying technology behind ChatGPT and Anthropic’s Claude, to speak of. Before Gemini, Google’s models weren’t exactly beloved, but at least they were making progress. It was similar to Meta and its Llama family of models, though, in its case, it could point to accelerating advertising growth as a result of its AI investments. Apple Intelligence unveiled June 10, 2024 Apple hoped to silence the doubters at its annual Worldwide Developers Conference, known as WWDC, in June 2024. That’s when it unveiled a suite of AI features dubbed Apple Intelligence, and the stock ran up into the event. The on-screen demos looked cool, but the reality in the months that followed was ugly . The rushed and botched release of Apple Intelligence made clear that Apple’s AI strategy wasn’t fully fleshed out. The iPhone maker was still trying to figure it all out, while others — including startups like OpenAI and Anthropic — were pumping out new large language models on a regular basis. And, all of that usage of the LLMs was flowing into the coffers of the cloud providers. iPhone 17 announced Sept. 19, 2025 Apple essentially punted on new AI software features in 2025, a year also marked by tariff obstacles unrelated to AI. But what it did succeed at last year — a hit new piece of hardware in the iPhone 17 — underscored the company’s biggest advantage in the AI race: it has billions of devices already out in the world. Indeed, Apple shares had a strong fall as the iPhone 17’s popularity became clear, much to the surprise of some on the Street ( but not us ). A big development in Apple’s AI strategy came in January, when Google confirmed reports that it signed a deal with Apple to license its Gemini models and cloud technology. In exchange for paying reportedly $1 billion a year , Apple can build off Gemini for its own models and a much better Siri. New Siri introduced June 8, 2026 To be sure, Apple already had a tie-in with ChatGPT, but it was more of a band-aid for Siri rather than a complete AI overhaul of the iPhone native smart assistant. With Apple leveraging Gemini, the market started to feel better about what Apple Intelligence and Siri could become later in the year. The realization was setting in: Apple may not be first, but it was the only one that already had an outlet for AI, the iPhone, in some 1.5 billion pockets around the world. Factor in how much users’ mobile devices know about them, and the Street recognized that if Apple could execute on the Gemini partnership, it may well leap over everyone in terms of the adoption of its AI offering. Apple showed off its retooled AI suite at WWDC in June. The stock got hit with some profit-taking after the event , but we like what we saw. The full rollout of the improved Apple Intelligence is set for the fall, when Apple introduces its latest operating systems for iPhones, Macs, iPads and the Apple Watch. What’s next? Execution remains the big question, but doubts around Apple’s strategy have largely subsided. Apple is doing with AI what it did with search engines. Rather than compete with Google, they partnered. As a result, Apple could remain focused on selling as many iPhones as possible, while Google was responsible for providing the best Google Search experience possible. Two companies, working together, both responsible for doing what they do best. The result was a best-in-class product and investments that made sense for both companies. The same thing is playing out with AI now, and Wall Street has seen the light. Instead of punishing the company for not participating in an LLM arms race, Apple is being rewarded for being one of the only megacaps that has kept free cash flow intact. It’s not vying to be the best LLM provider on the planet. Instead, it is seeking to be the widest-reaching provider of AI-capable devices — something it already has a massive head start in, again, thanks to the incredible success of the iPhone. This dovetails with the broader debate around token optimization and likely explains the latest leg of the Apple rally after the pullback to start June. With the rapid advances of LLMs, companies and consumers alike are starting to realize that the capabilities are starting to outpace the needs for most users. Put another way, most users don’t need frontier AI models and, as a result, more commodity-like models may actually offer up a better value for most. That plays to Apple’s favor. If Apple can take a non-frontier model and layer in the personal data from your iPhone, it may prove more valuable to users than a frontier model that doesn’t have access to that data. Better yet, it means that Apple doesn’t have to rush out a new, more capable model every other month just to keep up — contrast that to the frequent model announcements from OpenAI, Anthropic, Google, and Meta. That keeps costs down, value to the consumer high, and financial health intact. In addition to AI execution, the other big question around Apple’s stock is surging memory prices (this is also a question for the megacaps paying for memory with their AI chips). However, Apple shares have largely been able to overcome this headwind, and the reason may be two-fold. First, Apple tends to sell a more premium product to a more affluent consumer. As a result, Apple has the pricing power needed to pass through its own higher costs with minimal demand erosion (or, at least, less erosion than if it were catering to lower-income consumers) — especially when you factor in service provider subsidies. That helps protect profit margins, despite increased input costs. Second, while Apple is raising prices to protect profit margins in the near term, any relief in memory prices down the line should actually help expand profit margins because Apple rarely lowers selling prices. While hiking Mac and iPad prices first, the big test will be where iPhone prices go. We expect to find out more on that at the company’s annual fall launch event. (To be sure, relief in memory prices is likely so far off that it doesn’t make sense to invest based on that, but it is something for longer-term investors to keep in mind.) Bottom line While hindsight is 20/20, the reality is that Apple is winning because it stayed true to itself. Apple, though it certainly is innovative, has always done better by staying patient and watching a market form before entering with a better, more sensible product. It was a hallmark of Steve Jobs’ revival of the company — a torch carried by outgoing CEO Tim Cook and soon-to-be chief executive John Ternus. The iPod was not the first MP3 player. The iPhone was not the first smartphone. The iPad was not the first tablet. The Apple Watch was not the first smartwatch or health tracker on your wrist, and AirPods weren’t the first wireless headphones. And yet, all these products went on to be massively successful as Apple took its time and refined existing offerings in the market, while integrating them into a frictionless ecosystem that made each offering all the more valuable than what anyone else could possibly bring to market. If there’s one flop, it is the Vision Pro in the virtual reality headset market. But on the whole, it’s hard to argue with the results of being late and better, versus first and mediocre. With that same strategy being implemented for the company’s AI ambitions, it’s no wonder the Street has come around and rewarded the company with an all-time high stock price. The doubters have been proven wrong. Along the way, Apple has once again reminded us why it is one of the most valuable companies in the world and why its stock should be owned for the long term, not traded. (Jim Cramer’s Charitable Trust is long AAPL, AMZN, GOOGL, META, MSFT and NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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