Apple Reports Strong Growth Without Heavy AI Investment
Apple reported a strong quarterly performance with revenue rising 16% to $109.4 billion, driven by rebounding iPhone sales and robust Mac growth. Earnings per share increased 29%, surpassing expectations. Despite this success, Apple's stock fell over 9% in early trading due to concerns about slowing future growth, tighter supply chains, and rising memory costs impacting margins. Unlike its Big Tech peers such as Microsoft, Alphabet, Meta, and Amazon, which are heavily investing in AI infrastructure like chips and data centers, Apple is taking a more cost-effective approach. It relies on device-based processing, internal servers, and third-party cloud resources rather than building large public-cloud networks. However, memory costs continue to pressure gross margins, with the company expecting them to fall further in the next quarter. Apple's research and development spending rose 32% to $11.7 billion, indicating continued investment in AI capabilities like Siri. CEO Tim Cook noted that while Apple may eventually become more capital-intensive due to its AI initiatives, it is currently managing costs through a balanced strategy.
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Topics: AI spending Apple Big Tech comparison Gross margin Revenue growth