Missed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n There are four AI hyperscalers, and it won’t be surprising if those tech megacaps spend close to $800 billion combined on capital expenditures<\/a> this calendar year as they take part in the AI infrastructure build-out. Apple, though, is staying on the sidelines. It continues to watch this unprecedented infrastructure spending boom from afar. The company’s capex through the first nine months of its fiscal 2026 totaled just $6.8 billion. <\/p>\n This is because Apple is following an AI strategy that’s different from those of its big tech peers. Beyond maintaining its pristine financial position, it is focusing on integrating its AI system, known as Apple Intelligence, in its existing lineup of products and services. The objective isn’t to launch a new chatbot or cloud computing division. The primary goal is to strengthen the ecosystem that makes up the company’s walled garden. <\/p>\n “Apple has created the world’s best hardware to experience AI, whether using Apple Intelligence, including Siri AI, or third-party offerings,” CEO Tim Cook said on the fiscal Q3 2026 earnings call this month. <\/p>\n The iPhone dominates consumer hardware <\/p>\n The most important question about Apple’s long-term competitive position is whether or not the iPhone will remain the primary way that consumers access the digital world. The product line will celebrate its 20th birthday next year, with no formidable threat on the horizon in the premium segment of the market. If industrywide AI capabilities improve, adoption takes off, and a rival company (like OpenAI) introduces an AI-native device that becomes incredibly popular, it could pose a threat to Apple’s dominance. There’s no reason to worry about that yet, though. <\/p>\n Story Continues <\/p>\n Between its fiscal 2020 and fiscal 2025, iPhone revenue grew at a compound annual rate of 8.8%. In each of the first three quarters of fiscal 2026, sales for the flagship device increased by more than 20% on a year-over-year basis. <\/p>\n Because the iPhone still accounts for more than 50% of Apple’s entire revenue base, its success is a major factor in the overall company’s financial performance. Demand has been robust for the iPhone 17 family, with a total iPhone installed base that’s at an all-time high. This is a clear indication that Apple’s wide economic moat is intact, supported by its influential brand, pricing power, customer loyalty, and unrivaled distribution. <\/p>\n Paying the right valuation is critical <\/p>\n Starting in the fourth quarter of 2023, Warren Buffett-led Berkshire Hathaway started reducing its huge stake in Apple. The position, which remains the conglomerate’s largest single equity holding, declined from 915 million shares at its peak to 228 million shares as of March 31 this year. There’s no doubt that part of the reason Buffett had for trimming it had to do with the stock’s valuation. <\/p>\n For the Oracle of Omaha, valuation is a critical part of the investing formula. Individual investors should also think this way. Paying too much for a stock, no matter how wonderful the business is, is a recipe for subpar returns. <\/p>\n Apple shares currently trade at a price-to-earnings ratio of 35. This looks like an elevated valuation. <\/p>\n However, consider that the company is expected to produce $144 billion in free cash flow (FCF) this fiscal year on $478 billion in revenue, according to the sell-side analysts’ consensus view. At the same time, Apple’s big tech peers are seeing their FCF dwindle or even turn negative. <\/p>\n Apple stock appears to be fairly valued, in my opinion. It’s up to investors to decide if that warrants adding it to their portfolios. <\/p>\n Should you buy stock in Apple right now? <\/p>\n Before you buy stock in\u00a0Apple, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Apple\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $421,511!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,381,960!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by nearly 5x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of August 16, 2026. <\/p>\n Neil Patel<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: The Motley Fool. A tighter approach to AI <\/p>\n