Shares of Apple (NASDAQ:AAPL | AAPL Price Prediction) have been steadily sinking lower since the year began, but things could have been a whole lot worse, especially given the state of the tech trade and fellow Mag Seven firm Microsoft (NASDAQ:MSFT) nosediving more than 31% from its all-time highs. Of course, there’s a hint of enthusiasm when it comes to Apple, even with the weight of higher memory and storage prices caused by the AI buildout.
As Apple’s AI strategy begins to take shape (some delays, in my view, are a sign that the AI quality bar has been raised), while the company strives to offer better value for consumers in a year where electronics suddenly became that much more expensive due to the higher costs of RAM and solid-state drives (SSDs), I’m more inclined to view Apple as a prime share-taker as it looks to offer a year where it’s offering perhaps the best slate of value ever.
Apple has the high-value offering down early
The year may have just begun, but the iPhone 17e is storming out of the gate, as is the MacBook Neo. Indeed, these budget products seem to be too affordable to delay an upgrade until RAM and storage prices normalize (who knows when that will be). Either way, early-2026 seems to be the year of value, and Apple’s delivering. As affordable as the 17e and Neo are, though, Apple doesn’t appear to be compromising. The devices still have the impressive firepower of the A19 and A18 Pro chips, respectively.
These chips represent a considerable leap in performance for consumers on the fence about whether or not it’s worth the while to upgrade from an aging device to the most affordable newer line of devices. As I’ve explained in a prior piece, the A-series chip makes the upgrade worthy, and with the lower price, it’s a deal that’s too good for many to refuse, especially in this economy.
Of course, buyers can always upgrade their RAM and storage from the base, and while it could make a super-affordable phone that much pricier, I still think granting customers options is the right way to go as they look to navigate around their tightening budgets. Either way, Apple has been very smart in navigating this environment where memory prices are overheated.
Apple’s silicon advantage could help it shine
While other device makers have impressive budget offerings as well, Apple’s silicon advantage, I think, is key to dominating the budget class in 2026. What’s more, though, is the opportunity to sell users on Apple Intelligence. Of course, Apple is slowly but surely getting AI right. And as AI goes closer to the edge, I think the silicon advantage will be made that much more important. For now, most users aren’t upgrading to better hardware to run AI on.
But as time goes on and AI features get better, I expect more will consider the AI factor when upgrading. Perhaps it is AI that’s key to convincing a user of an older Pro iPhone to consider making the jump to a newer non-Pro model.
In any case, the smartphone market faces considerable pressure this year. But that might be more of a problem for Apple’s peers. According to Morgan Stanley’s Erik Woodring, the iPhone is leading in the U.S. and has traction in China, and that might help it win share in a down year. I couldn’t agree more. Add the rumored foldable iPhone into the equation, as well as AI surprises and I think Apple stock is well on its way to new highs, as it perfects offerings for the high-value crowd as well as the very best for the “Pro” crowd.
In any case, I think Apple is more defensive amid the AI stock slide than many give it credit for, especially as CapEx concerns remain.
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