Dan Niles Says Apple Was ‘Incompetent’ With AI, So Why Is The Stock at All-Time Highs?

Dan Niles, founder of Niles Investment Management, says Apple's (AAPL) slow start on artificial intelligence (AI) turned into an accidental advantage, even as he flags valuation risk ahead of its earnings report this week.

Apple's stock recently reached new all-time highs, hitting a record closing price of $336.91 on July 27. This surge pushed Apple's market capitalization to roughly $4.93 trillion, allowing it to reclaim the title of the world's most valuable public company from Nvidia. The company reports fiscal third-quarter results on July 30.

Apple's AI Delay Was Actually a Lucky Break

Speaking on CNBC's Squawk on the Street, Niles said Apple avoided the AI spending spree that has hit rivals' cash flow.

"Sometimes you get lucky for being incompetent," Niles said, adding that Apple was "horrible" at getting AI onto iPhones.

That weakness now looks like an edge. Alphabet has raised its 2026 capital expenditure (capex) guidance to $195 billion to $205 billion for AI infrastructure. The spending pushed Alphabet's free cash flow negative in the second quarter, the first such quarter since its 2004 initial public offering (IPO), the process by which a private company first sells shares to the public.

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