Smarter AI play than Nvidia?

Semiconductor stocks are one of the biggest winners of the generation AI boom as tech companies rush to ensure as much computing power as possible to train and deploy AI models. For context, GPU reader Nvidia Stock (NASDAQ: NVDA) has skyrocketed about 170% since early 2024, while Broadcom Stock (NASDAQ: AVGO), which offers custom AI chips, has risen by 110%. However, concerns have emerged that more efficient AI models like China’s DeepSeek Gain Traction could lead to lower demand. Find out how Deepseek’s AI model affects Nvidia stock. Apple Stock (NASDAQ: AAPL) believes it is a good place to make profits in the next phase of AI growth. The company began AI pushing in late 2024 with the launch of Apple Intelligence Tools for iPhones, iPads and Macs. It has a vast user base, powerful semiconductor design capabilities, and the ability to provide secure, personalized AI with minimal reliance on expensive clouds. Computing, Apple can make a huge profit. Apart from that, are they positive or negative? See what the tariffs on metal stock mean.

AI drives the upgrade cycle

Despite being a late participant, Apple’s new Apple Intelligence Suite was impressed with the implementation of upgraded Siri feature, writing assistance, calculator improvements, and image generation. This contrasts with many major tech companies still looking for solid use cases or business models for generating AI. It’s mainly software updates, but Apple Intelligence is only available on iPhone 16 and 16 Pro models, with last year’s iPhone 15 Pro being the only exception. This limited compatibility will allow older iPhone users to upgrade. The software launched in late 2024, but iPhone sales remained relatively flat, with revenue falling 1% year-on-year to $69.2 billion in the holiday quarter. However, sales growth could be on the horizon. It uses an unrequited Apple approach, and features are gradually introduced with each update. Many customers may be waiting for all AI features to be deployed before upgrading. Additionally, Apple Intelligence is currently available for less than 20% of the entire iPhone user base, providing greater room for growth. As AI expands to more devices, it could potentially reinvigorate sales of Apple’s iPhone and iPad.

Growing services

Apple’s services division has generated approximately $100 billion in revenue over the past year. In the first quarter of 2025 alone, service sales rose 14% year-on-year to around $26 billion, reaching an all-time high. This segment remains Apple’s fastest growing division, powered by robust app sales and over 1 billion paid subscriptions. Tools with AI can further accelerate growth in multiple ways. Apple can introduce premium features and new subscription products to enhance applications with AI capabilities. Furthermore, increasing storage needs for on-device AI processing may open up new monetization opportunities. Even a modestly priced AI subscription with over 2.3 billion active devices can create a substantial revenue stream. Check out Apple’s service business revenue breakdown. Unlike other large tech companies that invest hundreds of billions of people in AI-related capital expenditures, Apple’s on-device AI processing strategy means customers, not Apple itself, carry higher computational costs . Find out how DeepSeek’s AI models affect AVGO stocks.

Deepseek’s breakthrough benefits Apple

China’s Deepseek AI breakthrough has disrupted the AI ​​semiconductor industry and has affected stocks like Nvidia. Deepseek highlights software-driven optimizations around reliance on powerful hardware, significantly reducing the cost of AI model training. Reports show that Deepseek trained the V3 model for just $5.5 million. This increased efficiency could weaken the demand for high-end GPUs as AI companies adopt DeepSeek’s open source methodology. This poses challenges for semiconductor companies like Nvidia, but could work in Apple’s favor. DeepSeek creates smaller, more efficient AI models that work effectively on basic hardware such as PCs and smartphones, and can sometimes outperform larger models with key benchmarks. If AI development trends are moving towards lightweight, localized models, Apple could become a major beneficiary due to its personal computing advantage. Famous for its power efficiency and performance, Apple’s M-Series processors are suitable for handling such workloads. As an aside, let’s see what’s going on on Amazon Stock.

AAPL stock performance has not been consistent over the past four years. Returns fluctuated more than the S&P 500’s return. The stocks won 35% in 2021, -26% in 2022, 49% in 2023 and 31% in 2024. TREFIS’s high-quality portfolio, consisting of 30 inventory, surpassed the S&P 500 in the same period, while still having less volatility. why? HQ Portfolio Stocks have historically provided stronger returns due to their lower risk compared to benchmark indexes. See HQ Portfolio Performance Metrics. Given today’s uncertain macroeconomic environment, including interest rate concerns and geopolitical conflicts, can AAPL see another recession like 2022?

We remain neutral with AAPL stocks, with a price estimate of $228. Although Apple is a major AI beneficiary, its stock will trade at a relatively high 31x advance revenue, despite revenue growth forecasts for the next two years. Meanwhile, we are weakened by NVDA stocks, with the $93 price estimate 30% below the current trading price.

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