While technology stocks tumbled on Monday due to concerns over China’s DeepSeek R1 large language model, Apple stock (AAPL) bucked the trend by rallying in today’s trading session. Unlike its big-tech peers, Apple hasn’t invested heavily in AI research and development and has instead opted to partner with companies like Microsoft-backed OpenAI (MSFT). Indeed, Apple’s former CFO, Luca Maestri, noted during the firm’s 2024 second-quarter earnings call that the company relies on a combination of its own data center capacity and third-party providers.
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This approach seems to be paying off, as Apple’s more measured spending on AI infrastructure could benefit the company in the long run. In contrast, Microsoft plans to spend $80 billion on data centers in 2025, while Meta Platforms (META) aims to invest between $60 billion and $65 billion on AI infrastructure.
In addition, Bank of America’s five-star analyst, Wamsi Mohan, believes that if DeepSeek’s AI model reduces costs, Apple could be a major winner. Mohan argues that Apple’s focus on edge applications, combined with its existing ecosystem, makes it an attractive play on AI. With a Buy rating and $253 price target on Apple, Mohan sees the company as a key long-term beneficiary of AI advancements.
Is Apple a Buy or Sell Right Now?
Overall, analysts have a Moderate Buy consensus rating on AAPL stock based on 19 Buys, seven Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 21% rally in its share price over the past year, the average AAPL price target of $243.24 per share implies 4.9% upside potential.
