Mad Money host Jim Cramer has made it pretty clear in the past that Nvidia (NASDAQ:NVDA) was his favorite AI stock. Indeed, he went as far as to name his dog Nvidia to get the point across. And while Cramer is still fond of the stock and its legendary founder, Jensen Huang, Cramer has really sounded upbeat about shares of iPhone maker Apple (NASDAQ:AAPL), which has dragged its feet relative to the other six members of the Magnificent Seven.
With shares of the name getting slammed on the iPhone 17 keynote, only to gain back the ground and then some in the following sessions in response to hot demand for the device (the lineups are back and the Apple Store is packed), perhaps Apple might be the AI stock that has the most ground to run as it looks to close the gap with its rivals in the new year.
Apple shares are gaining again. Perhaps the sellers during the iPhone 17 reveal were wrong to sell.
Indeed, it’s not hard to imagine that many AI investors are getting impatient with shares of Apple, even after its latest September surge of around 10%. Year to date, AAPL stock is up just over 4%, falling well short of your average Magnificent Seven member. And with a lack of AI in the latest keynote, investors are likely feeling in the dark when it comes to the AI strategy. Still, Cramer astutely noted that Apple doesn’t really need to spend money hand over fist to catch up in AI. Indeed, with the favorable judge ruling for Google of Alphabet (NASDAQ:GOOG), Apple may still be able to go ahead to let AI model makers compete for a spot on the mighty iPhone.
If anything, Google may need to pay Apple to have Gemini as a default model on its devices in the future, pretty much mirroring the search deal that’s been in place for quite a while.
“Turns out Apple always had an AI strategy: pay to play.” said Cramer. That sums up Apple’s plans in a nice nutshell.
In any case, Cramer is right in that Apple does have “all of the cards.” It has a massive installed base, which clearly has not gone anywhere, even with no spruced-up Siri in the latest iOS 26. Indeed, Apple fans seem more than willing to wait for the juggernaut to catch up on AI. Otherwise, we wouldn’t be seeing the crowds over at the local Apple Store, trying to get their hands on the iPhone 17 as well as the new iPhone Air.
Apple’s AI approach is likely highly underrated
Could it be that Apple has all the leverage to walk away as one of the big winners from the AI race without having to spend as much to stockpile Nvidia GPUs while paying a fortune to train models? I think that may very well be the case. While Apple is still committing to spend a great deal on AI data centers, I do think that the odds are high that Apple will not only see a return on AI spend, but a high one that might be the envy of the industry.
Though Cramer hasn’t explicitly referred to Apple as his new favorite AI stock, I am encouraged by his commentary at a time when most others are likely ready to throw in the towel on the Cupertino-based giant. If you sold the stock on the keynote, you’re probably in a tough spot, wondering if it’s worth buying back at around $255 per share.
Given the sweet deals that only Apple can ink in AI and the recently rumored AI search product that could help Siri as soon as next year, I think it’s no longer fair to deem that Apple is behind on AI. When it comes to monetization potential, perhaps Apple might be ahead. And with growing calls for profitability on AI spend, perhaps Apple stock could be granted a free pass if the AI trade goes through its next big correction.
The bottom line
I think Cramer is right to stand by Apple, especially with the growing number of skeptics and critics who don’t see that Apple is playing the long-term game with its AI strategy. Why rush ahead with a commoditized model when you can play the long game and potentially earn handsomely for doing so?
Though I don’t always agree with Cramer, I think his bold, contrarian view of Apple and its AI plans could make his listeners a lot of money. It’s certainly the best take on Apple I’ve heard all year, as it really clears the air on the real opportunity for Tim Cook and company.
As the iPhone 17 kicks off a nice upgrade cycle (maybe a super cycle?) while new AI efforts come to light, I think Apple stock is a great comeback play, even at 38.8 times trailing price-to-earnings (P/E).
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