惠理投資

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Is Wall Street collectively 'defecting' from the AI infrastructure boom? $600 billion flows back into Apple in 20 days! What is the market betting on?

While everyone worries that AI spending won’t yield returns, capital is quietly doing something 'counterintuitive': selling the so-called AI 'shovel sellers' and returning to a name that’s been out of favor all year.
On July 13,$Apple (AAPL.US)$ It hit an intraday record high of $323.45, rebounding 16% from its June 25 low and adding nearly $600 billion in market value. It closed at $320.53, up roughly 17% year-to-date in 2026, making it the best-performing stock among the 'Magnificent Seven.' The group also includes$NVIDIA (NVDA.US)$ , Alphabet (Google’s parent company),$Microsoft (MSFT.US)$$Amazon (AMZN.US)$ 、 $Meta Platforms (META.US)$ and$Tesla (TSLA.US)$ 。
Around the same time,$PHLX Semiconductor Index (.SOX.US)$ Down about 10%, the Nasdaq 100 index rose only modestly by 0.3%. NVIDIA, Microsoft, and Amazon all came under pressure amid investor concerns over returns from their massive AI-related capital expenditures. Both Alphabet and Amazon have fallen more than 10% from their May highs, while Microsoft is down 20% for 2026, on track for its worst annual performance since 2022.

Mark Bronzo, Chief Investment Strategist at Rye Strategic Partners, summed up the core logic in one sentence—

"Apple is benefiting precisely because it isn’t at the center of this AI storm. Investors are worried about what returns hyperscale cloud providers will actually get from their enormous AI investments, and they also believe semiconductor stocks are overvalued. As a result, capital is flowing back into stable stocks like Apple that don’t carry these risks.。"

A month ago, the market said Apple was 'falling behind in AI.' A month later, the market says Apple has 'the smartest AI strategy.'

What’s changed isn’t Apple—it’s the market’s understanding of 'how to win at AI.' Avoiding the data center arms race has become its biggest advantage.

💡 Apple is doing something none of the other tech giants dare to do: refusing to burn cash.

While Microsoft, Amazon, and Google are each spending tens of billions of dollars annually building AI data centers—Meta expects its 2026 capital expenditures to reach $125–145 billion, nearly double its 2025 level—Apple has chosen a radically different path.

It’s using Google’s Gemini to power Siri and the new Apple Intelligence, avoiding building its own large language model, purchasing hundreds of thousands of GPUs, or joining the compute arms race.

Bloomberg notes that investor skepticism is growing over whether these massive AI expenditures will yield adequate returns. Apple’s decision not to join the data center race is now being reassessed—not as a capability gap, but as a strategic advantage.

Apple is betting that the endgame for AI lies on the device side (edge devices), not in the cloud. Its negotiations with startup PrismML—which has developed technology to shrink large language models so they can run directly on devices—suggest that if successful, this AI approach could cost far less than competitors’.

In early July, JPMorgan warned that the AI frenzy is replaying the 1999 internet bubble playbook, with markets beginning to question whether massive AI investments can truly translate into meaningful returns. Goldman Sachs also noted that widespread market concerns center on the risk that hyperscalers could abruptly slash their enormous spending.

In this high-stakes AI bet, 'not betting' itself might be the biggest winner.

📊 But Wall Street’s divergence is greater than you can imagine—Citi just raised its price target from $315 to $365.

On July 13, ahead of Apple’s earnings report due on July 30, Citi released a research note sharply raising its price target from $315 to $365.

Citi analyst Asiya Merchant’s core thesis is:

• Despite slowing demand in the end-device market, Apple continues to gain market share, and its selective ability to raise prices helps offset margin pressure.

• Although Apple Intelligence is unlikely to drive a significant upgrade cycle in the near term, Siri’s AI enhancements will boost user loyalty, supporting long-term growth in its high-margin services business.

• The iPhone launch in September is an 'important catalyst' that could further lift investor sentiment.

But pessimists exist as well—

Independent research firm Hedgeye has added Apple to its short list, arguing the stock has roughly 23% downside potential. Reasons include its high valuation (approximately 34x P/E) and overly optimistic growth expectations already priced in. According to StockAnalysis data, Apple’s trailing P/E ratio has reached 38.22x. Hedgeye contends that sustaining this valuation would require double-digit growth in Greater China during fiscal years 2027 and 2028—a target it deems overly optimistic given competitive pressures from Huawei.

Barclays maintains a 'sell' rating with a price target of $253—implying roughly 21% downside from the current level of $320.

Some bullish Wall Street analysts argue that 'on-device AI plus new foldable devices = a supercycle,' forecasting Apple's fiscal 2026 revenue to grow nearly 15% and net profit to rise 17%, marking its fastest growth since 2021.

Some bearish Wall Street analysts contend that 'AI features alone won’t compel users to spend $1,500–$2,500 on an upgrade, and the stock’s 38x P/E ratio has already priced in excessive optimism.'

📦 Merely 'spending less' isn’t enough to justify a $4.72 trillion market cap.

If Apple is only focused on 'cutting costs,' it may not be able to reach a new all-time high of $323.

Apple has another card to play—fiscal 2026 will be its most product-intensive year in recent memory.

Mass production of the first foldable iPhone (tentatively named iPhone Ultra, with a starting price of $2,300–$2,500 or RMB 14,999 in China) is set to officially begin in late July. Production targets have been raised from the previous 7–8 million units to approximately 10 million units.

However, supply chain concerns remain—

According to the latest research by well-known Apple supply chain analyst Ming-Chi Kuo, foldable iPhone assembly shipments in the second half of 2026 are expected to reach 7–8 million units, with only 0.5–1 million units shipped in Q3—roughly 10% of the total. Due to the entirely new structural design, initial production yields are still ramping up, and mass deliveries are not expected until Q4.

It will launch alongside the iPhone 18 Pro series in September. Additionally, AI-powered glasses, AI-enhanced AirPods, and a major iPad redesign are all on the roadmap.

Three developments are converging and materializing in the same quarter:

① WWDC has addressed concerns about Apple falling behind in AI by unveiling 'Siri AI + Gemini collaboration'

② Mass production of foldable devices responds to criticism over conservative form factors

③ A $2,500 price point combined with full-year production targets counters skepticism about the iPhone cycle peaking

This triple narrative reversal,叠加 a 'safe-haven' effect from Apple’s stance of 'not joining the arms race,' is the fundamental driver behind Apple’s share price rise from $275 to $323.

⚠️ The July 30 earnings report will be the first 'validation point'

Apple plans to release its Q3 earnings after market close on July 30. Multiple institutions have provided market expectations: 'Revenue of approximately $108.86 billion and EPS of about $1.89.'

The three key items to watch closely this time are:

① Management’s shipment guidance for foldable devices—will they provide specific numbers? Is the shortage due to 'strong demand outstripping supply' or 'weak production capacity'?

② Greater China revenue—can it sustain its previous growth momentum?

③ Service revenue — can it continue to hit a new quarterly high?

The market is currently pricing in a 'narrative premium.' After July 30, the market will demand 'data validation.'

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Data sources: Stock price and market cap from Jinshi Data / Guandian.com (July 13); Mark Bronzo’s view from Jinshi Data; Citi’s upgrade of target price to USD 365 from Gate / Longbridge (July 13); Hedgeye’s short report and valuation analysis from Longbridge (July 10); StockAnalysis valuation data (July 14); Guo Mingzhi’s foldable display shipment forecast (July 7); foldable display mass production and inventory data from Securities Times (July 3); JPMorgan’s AI bubble warning from FX168 (July 3); Goldman Sachs’ concerns on AI spending from Sina Finance (July 2); Meta’s capital expenditure from China Economic Net (July 5); Apple’s FY2026 revenue and profit forecasts from Futu (July 13); bullish Wall Street views and data from Tonghuashun / Futu / Longbridge (July 13); bearish Wall Street views and data from Yahoo Finance / StockAnalysis / GuruFocus (July 13); Apple’s Q3 earnings date and Wall Street consensus estimates from Longbridge / TipRanks / The Wall Street Journal / EarningsHub (July 13).

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