Apple's stock closed at an all-time high of $336.91 on July 27, pushing its market capitalization to roughly $4.93 trillion and reclaiming the title of the world's most valuable public company from Nvidia. The milestone comes just days before the company reports fiscal third-quarter results on July 30, with Wall Street expecting revenue near $108.9 billion and earnings per share of $1.89, up from $1.57 a year earlier.
Why Apple's AI approach stands apart
Dan Niles, founder of Niles Investment Management, called Apple 'incompetent' with artificial intelligence but argued that slow start turned into an accidental advantage. Unlike rivals that have poured billions into AI infrastructure, Apple avoided the spending spree that has weighed on competitors' cash flow. Alphabet, for instance, raised its 2026 capital expenditure guidance to a range of $195 billion to $205 billion for AI infrastructure, and its free cash flow turned negative in the second quarter — the first such quarter since its 2004 IPO.
Apple reportedly pays Google around $1 billion a year to license a custom Gemini model for Siri's AI upgrade, a relatively modest outlay compared to the massive internal investments at Alphabet, Meta, and Amazon. Niles said he plans to stay largely on the sidelines for Meta and Amazon due to AI capex concerns.
The cost squeeze that could spoil the party
Despite the stock's run, Niles warned that Apple could be exposed if Thursday's numbers disappoint. Memory chip costs have surged this year, forcing price hikes across the phone market and squeezing margins. Apple's price-to-earnings ratio sits in the high 30s, well above the S&P 500's roughly 22 times earnings, leaving little room for error.
The company's market cap gain — roughly $4.93 trillion — reflects investor optimism about a potential iPhone upgrade cycle tied to AI features. But the chip cost pressure and the high valuation mean the earnings report will be a critical test.
What to watch on Thursday
Investors will be listening for any update on Apple's AI rollout, particularly the Siri upgrade powered by Google's Gemini model. They'll also watch for signs that rising component costs are eating into gross margins. Niles' warning about Apple's 'incompetent' AI start may prove prescient if the company can't deliver on the AI promise that has helped lift its stock. The July 30 report will show whether the record high was a signal of strength or a peak before a pullback.
