Apple’s unique AI playbook delivers gains for investors

While technology giants burn through hundreds of billions building artificial intelligence infrastructure, Apple is quietly placing a different bet. The company is developing smart glasses, camera-equipped earbuds, and wearable pendants that put AI on your body instead of in massive server farms.

The contrast is striking. Amazon, Alphabet, Microsoft, and Meta are planning to spend more than 650 billion dollars on AI this year. That’s one of the largest single-year investment ramps in the sector’s history. Apple is expected to spend just over 14 billion dollars in fiscal 2026. That’s flat from the previous year and a tiny fraction of what its competitors are pouring into the technology.

At an employee meeting earlier this month, chief executive Tim Cook hinted at the company’s direction. He said Apple was working on new categories of products and was extremely excited about that. He added the company was investing in new technology because the world is changing fast.

Apple is ramping up work on three new wearable devices that depend on cameras and connect to the iPhone through an enhanced Siri assistant, people familiar with the plans told SCMP. The products include smart glasses, a pendant that clips to clothing or hangs as a necklace, and upgraded AirPods. All three rely on visual context to help the digital assistant carry out tasks. The AirPods and pendant are simpler, equipped with lower-resolution cameras designed to help the AI work, rather than for taking photos or videos. The glasses will be more upscale.

While iPhone sales remain robust, Apple is playing catch-up. Revamping Siri has been a key challenge, with upgrades plagued by development snags that delayed rollout. The company is preparing a version of the assistant for iOS 27, due later this year, that will have a chatbot-like interface. Apple will rely on underlying models co-developed with Google.

AI is expected to change how consumers use phones, with more activities shifting to peripherals. Meta’s glasses have already become a hit, and OpenAI is developing devices, including wearables, with the help of former Apple design chief Jony Ive and other former Apple executives.

Apple’s last major push into a new category, the pricey Vision Pro headset, did not resonate with consumers. The company is looking for a breakthrough with its push into wearable devices, aiming to keep users locked into the Apple ecosystem.

$1 billion Google deal saves $100 billion in infrastructure

Apple is betting the industry will shift from massive, centralized training to on-device processing. Licensing Google’s Gemini for roughly 1 billion dollars yearly gives it access to advanced models without spending over 100 billion dollars to build its own.

Microsoft, Meta, and Amazon, the three companies pouring billions into AI infrastructure, are all negative over the past 12 months, down 4.35%, 5.97%, and 6.52% respectively. Apple, with its modest annual spending and 8.02% gain, is outperforming all three AI mega-spenders. The year-to-date numbers tell an even starker tale. Microsoft has crashed 17.99% in 2026, making it the worst performer in the group, while Apple sits at just -2.82%.

Apple emerges as a safe haven against this big spending story, just because their spending is relatively low. Apple’s 2025 spending was 12.7 billion dollars. Wall Street expects 2026 spending of 12.9 billion dollars. In comparison, Meta said in January it expects full-year spending to be between 115 billion and 135 billion dollars.

The fact that Apple hasn’t been spending nearly as much wasn’t always seen as a good thing. Wall Street wanted to see Apple push out strong updates that could keep existing customers excited and bring in new ones. But the company delayed the rollout of some of its most anticipated updates, and its existing tech has been underwhelming.

Margin pressure from chip costs, price hikes possible

It won’t be smooth sailing ahead. Margins are at risk because chips that go into Apple products are getting more expensive as demand for the memory that powers these systems outpaces supply. Chief executive Tim Cook hasn’t ruled out raising prices, but that could cut into demand from consumers struggling with a higher cost of living.

Apple is holding “special experience” event on March 4 according to Jason Goh who shared the invitation on Threads. The reports are saying it is preparing to announce several new devices in the coming weeks.

Wall Street will be looking for any signs of progress. That could add hope for growth to the haven buying now fueling gains in the stock.

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