Calling Apple (AAPL 3.73%) an artificial intelligence stock may have sounded like a stretch not long ago. But I think that view is getting outdated.
Yes, Apple is not spending massive sums like Amazon, Alphabet, or Meta Platforms to build out significant AI infrastructure. And yes, it is taking a more measured approach than many investors expected. But that may actually be part of what makes the stock compelling today.
Additionally, it may be the iPhone maker’s strong recent financial results, and the company’s measured approach toward the AI boom, that help explain why famed investor Warren Buffett has remained so constructive on the company.
Apple is still Berkshire Hathaway‘s (BRKA 0.07%)(BRKB +0.32%) largest disclosed equity holding, with a market value of about $62 billion at the end of 2025 — ahead of American Express at about $56 billion. And the Oracle of Omaha recently said Berkshire trimmed its Apple stake too soon and could buy even more if the price were low enough. That is not a trivial endorsement, given that it’s already the company’s biggest holding — and by far its biggest tech holding with ties to artificial intelligence (AI).
Here’s a closer look at three of the top reasons I think the biggest equity investment Warren left Berkshire with when he stepped down from his CEO role at the end of last year is a great buy today.
Warren Buffett. Image source: The Motley Fool.
1. Revenue is accelerating again
Apple‘s first quarter of fiscal 2026 (a period that ended on Dec. 27, 2025) showed an inflecting business. Revenue rose 16% year over year to $143.8 billion, and iPhone revenue surged 23%. That was a sharp step up from Apple’s fiscal fourth quarter of 2025, when revenue rose 8%.
Additionally, management said it expects fiscal second-quarter revenue to rise 13% to 16% year over year, despite being supply constrained during the period, suggesting the stronger top-line trend is continuing.
2. Profits are soaring
Even more, the tech giant’s earnings per share in fiscal Q1 rose 19% year over year to $2.84, outpacing its 16% revenue growth, highlighting Apple’s impressive operating leverage.
Bolstering its profitability is its high-margin services revenue, which reached a record $30 billion in fiscal Q1, up 14% year over year. This segment boasts a gross profit margin that is twice as high as its hardware sales, making it important to the long-term bull case. With over 2.5 billion active devices, Apple has an engaged user base that it monetizes through a broad range of services, including its own offerings such as Apple Pay, Apple TV, and AppleCare, as well as the fees it charges third-party apps. And big upgrade cycles, like the current one for iPhone with the iPhone 17 family, can provide a big catalyst for services.
3. Apple could be a major indirect winner from AI
This is the part of the story I think investors may still be underestimating.
Apple does not need to dominate model training or cloud infrastructure to benefit from AI. It may be enough for the company to become the preferred consumer distribution layer for AI. Management said in its fiscal first-quarter earnings call that most enabled iPhones are already actively using Apple Intelligence. In addition, Apple said it is collaborating with Google on next-generation foundation models that will help power future Apple Intelligence features, including a more personalized Siri.
That is interesting on its own. But what really stands out to me is the ecosystem angle.
Apple may not need to be the best AI model builder if it becomes the best place for consumers to actually use AI in daily life — whether it’s through Siri or the apps on its devices.
In fact, recent reports suggest Apple may eventually allow users to choose which AI chatbot they want to plug into Siri.
Finally, Apple could benefit from AI even more if it eventually finds its way into product design itself. Not only could AI lead to incremental features in existing Apple products, but it could eventually help support entirely new product categories.
Today’s Change
(-3.73%) $-9.65
Current Price
$249.21
Key Data Points
Market Cap
$3.8T
Day’s Range
$245.70 – $256.36
52wk Range
$169.21 – $288.62
Volume
1.2M
Avg Vol
47M
Gross Margin
47.33%
Dividend Yield
0.40%
There are risks, of course. For instance, the stock’s valuation, with a price-to-earnings ratio of 33, isn’t cheap. But I think there’s a good reason for this premium valuation. Not only is Apple’s business already inflecting, but AI could provide a powerful tailwind over the next 10 years, spanning software, services, and hardware.
In addition, Apple’s current business is extremely lucrative despite only having a few product lines. It may only take one or two new product lines over the next decade to drive significant sales growth.
Overall, I believe Apple remains an attractive long-term investment.
The business is reaccelerating, earnings are growing even faster than revenue, and the company has a realistic path to benefit from AI without incurring the same spending burden as the hyperscalers. And it helps that Buffett endorsed the stock by leaving it as Berkshire’s biggest equity holding when he handed over the reins to new Berkshire CEO Greg Abel.