Apple (AAPL) shares have finally shown signs of stabilization after a bruising 2025.
The stock, which had been down 17% for the year by the end of July, rallied nearly 9% in August—its strongest monthly gain since mid-2024. The shift came after CEO Tim Cook committed an additional $100 billion to U.S. manufacturing during a White House meeting, a move widely seen as easing tariff pressures from President Donald Trump.
The decision came at a crucial moment. Trump’s levies had already cost Apple $800 million in its fiscal third quarter, underscoring the financial strain of overseas production. By signaling greater domestic investment, Apple managed to defuse a key political risk that had weighed heavily on the stock.
AI Ambitions and Growing Competition
Alongside tariff relief, Apple has begun addressing another lingering concern: its late entry into the artificial intelligence race. The company has explored potential acquisitions of French AI firm Mistral—last valued at around $6 billion—and Perplexity, a fast-growing search startup backed by Nvidia (NVDA) and Jeff Bezos. Apple is also rumored to be in discussions with Google (GOOG) about using its Gemini platform to enhance Siri.
Alongside tariff relief, Apple has begun addressing another lingering concern: its late entry into the artificial intelligence race. The company has explored potential acquisitions of French AI firm Mistral—last valued at around $6 billion—and Perplexity, a fast-growing search startup backed by Nvidia (NVDA) and Jeff Bezos. Apple is also rumored to be in discussions with Google (GOOG) about using its Gemini platform to enhance Siri.
A broader AI strategy is taking shape. Reports suggest Apple is developing lifelike upgrades to Siri, a new line of AI-enabled robotics, and a smart speaker with a display. For investors, these moves mark a clear shift from Apple’s historically cautious approach to acquisitions and product roadmaps.
Still, risks remain. Elon Musk’s xAI has filed an antitrust lawsuit against Apple and OpenAI, accusing the two of stifling competition in the chatbot market. Legal experts warn the case could test whether U.S. courts define AI as a distinct market, a precedent that could reshape the industry.
Valuation, Sentiment, and the Analyst Divide
Even with the rebound, Apple’s shares are down about 10% in 2025, putting them among the weaker performers in the Nasdaq 100. That’s a sharp contrast with Nvidia, which continues to post gains, or Alphabet, despite its own regulatory overhang.
Skepticism about Apple is reflected in its valuation. The stock still trades at about 29 times projected earnings—well above its 10-year average of 21 times and slightly richer than the Nasdaq 100 multiple of 27. Analysts remain divided: fewer than 60% recommend buying Apple, the lowest rate among the Magnificent Seven save for Tesla (TSLA).
Even with the rebound, Apple’s shares are down about 10% in 2025, putting them among the weaker performers in the Nasdaq 100. That’s a sharp contrast with Nvidia, which continues to post gains, or Alphabet, despite its own regulatory overhang.
Skepticism about Apple is reflected in its valuation. The stock still trades at about 29 times projected earnings—well above its 10-year average of 21 times and slightly richer than the Nasdaq 100 multiple of 27. Analysts remain divided: fewer than 60% recommend buying Apple, the lowest rate among the Magnificent Seven save for Tesla (TSLA).
Yet momentum is building. Wall Street’s forecasts for Apple’s 2026 earnings have ticked higher by just over 2% in the past month, while revenue estimates are up nearly 3%. A recent quarter showed the company’s fastest revenue growth in three years, buoyed by iPhone sales and strength in China.
A Company at a Crossroads
Apple’s latest rebound suggests investor sentiment is improving as tariff risks fade and AI efforts gain credibility. But valuation concerns and regulatory threats—especially a pending Justice Department case that could jeopardize $20 billion in annual Google search payments—remain unresolved.
For now, Apple is no longer in Trump’s crosshairs, and its AI ambitions appear more serious than ever. Whether those positives can outweigh the structural challenges will determine if the stock’s August rally marks the start of a sustained comeback—or just a temporary reprieve.
Apple’s latest rebound suggests investor sentiment is improving as tariff risks fade and AI efforts gain credibility. But valuation concerns and regulatory threats—especially a pending Justice Department case that could jeopardize $20 billion in annual Google search payments—remain unresolved.
For now, Apple is no longer in Trump’s crosshairs, and its AI ambitions appear more serious than ever. Whether those positives can outweigh the structural challenges will determine if the stock’s August rally marks the start of a sustained comeback—or just a temporary reprieve.
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