Apple beat EPS estimates for the 8th straight quarter, authorized a fresh $100B buyback, and limits capex to $12.7B while AI peers burn through cash.
AI hyperscalers are projected to spend $2.1 trillion on capex through 2027, consuming roughly 95% of operating cash flows and pushing some into debt markets.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.
I keep buying Apple (NASDAQ:AAPL), and the more I read about what its Magnificent Seven peers are spending on AI, the harder my conviction gets. Every quarter I look at what this company actually does with the cash a phone business throws off, and I add to the position again.
Here is what pulls me back to the buy button. Apple sells hardware and software that hundreds of millions of people already use every day, and it turns that installed base into recurring cash. 2.5B+ active devices is the moat. Apple monetizes intelligence through the phones and Macs already sitting on desks, so it does not need to build a data center empire to justify an AI story.
Three data points anchor the position. First, cash generation. Full fiscal 2025 revenue was $416.16B, net income was $112.01B, and operating cash flow reached $111.48B. Buybacks alone consumed $90.71B of that. Q2 FY26 layered on $111.18B in revenue (up 16.6% YoY), EPS of $2.01 beating by 3.59% (the 8th consecutive quarter of beating expectations), a fresh $100B buyback authorization, and a 4% dividend raise to $0.27 per quarter.
Second, the balance sheet. Return on equity of 171.42%, return on invested capital of 53.35%, operating margin of 31.97%, and $147 billion in cash and marketable securities against $85 billion in debt. Third, capex discipline. Apple's full FY25 capex was $12.7B, and Q1 FY26 capex ran $2.37B, down 19.29% YoY.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.
Those are the two names a reader reaches for first when they think "AI winner." Both sit inside the hyperscaler capex curve I want to avoid. Vanguard's 2026 outlook projects AI scalers will spend roughly $2.1 trillion on capital investment from Q1 2025 through Q4 2027. Goldman Sachs' 2026 outlook flags that hyperscaler capex plus buybacks and dividends have consumed ~95% of operating cash flows over the last 12 months vs ~80% in 2019, forcing some of them into credit markets to keep the machine running. That is the trap I do not want retirement money exposed to.
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