Apple (AAPL 1.69%) stock rose 15% in May, according to data provided by S&P Global Market Intelligence. There was no news specific to Apple, but it's benefiting from market confidence in artificial intelligence (AI) and Apple's opportunity to leverage it.
Apple stock is back in action as investors flock to all kinds of AI stocks. Apple was expected to launch an AI program similar to its tech giant peers like Microsoft and Amazon, but it never materialized. Instead, Apple focused on its popular hardware, and specifically, the iPhone.
While the market wasn't too thrilled about it at first, the massive iPhone sales increases over the past few quarters have proven that it's been the right strategy. The iPhone is Apple's bread and butter, and focusing on that lead instead of diluting it through expanding out of its dominant space has been a winning approach.
Image source: Apple.
That doesn't mean there's no AI. Apple has launched many AI features that fit into its large ecosystem of products and emphasis on the user experience, in true Apple style. Some examples are live translation and an image cleanup tool. Apple prides itself on privacy, though, which is a big deal in the world of AI, because it scrapes the Internet for information. That could be part of the reason Apple is taking a different approach to its AI program.
It's also partnering with Alphabet to create custom large-language models (LLM) to drive its Siri digital assistant. Apple has been in the process of updating Siri for a long time, and although the launch has been delayed, reports are that it could be launched next week a the Apple Worldwide Developers Conference (WWDC).
As iPhone sales soar, with a 22% year over year increase in the 2026 fiscal second quarter (ended March 28), investors are realizing that Apple's value is in its device ecosystem, which remains a highly protective moat for the tech powerhouse. The integration of Apple intelligence into the ecosystem gives it a further edge against competitors, and Apple is part of the run-up in AI stocks.
The S&P 500 is up 11% year to date, but the tech and AI-heavy Nasdaq 100 is up nearly double at 22%. The top hyperscalers have increased their 2026 capital expenditures spend, and all kinds of AI-adjacent companies including energy companies and optical companies, are dealing with soaring demand. Apple stands to gain from improvement and advances in AI, and the market is prizing that right now.
Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Microsoft. The Motley Fool has a disclosure policy.
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