Key Highlights

  • Apple shares were trading up 5.99% at $351.80, against a prior close of $331.90.
  • The stock reached a record high of $354.47, up from a 52-week low of $243.42.
  • Reports say Apple cut some engineers’ daily AI spending allowance to $200 from $300.
  • Bernstein raised its target to $380, while DZ Bank downgraded the stock to Sell.
  • The stock trades at 37.80 times forward earnings.

A Record High on a Flight to Low-Spend Mega-Caps

Apple (NASDAQ:AAPL) shares were trading up 5.99% at $351.80 on Wednesday, on heavy volume, after touching a record high of $354.47. Investors rotated into cash-rich mega-caps after Democrats won Congress, favoring companies with limited exposure to Data Center buildouts over AI infrastructure names. The move outpaced the Nasdaq, which was up about 1.7%, as well as the Dow, up about 2.9%.

Microsoft (NASDAQ:MSFT) also rose more than 6% to a record, so the strongest gains went to the largest balance sheets.

Trimmed AI Allowances Fit a Cost-Control Narrative

Volume was about 63 million shares, and the stock now sits roughly 45% above its 52-week low of $243.42.

A report said Apple last month cut the daily AI spending allowance for some engineers to $200 from $300 and is considering reducing it to $100 for some teams. Some non-engineering groups already face a $100 cap that could fall to as little as $25, with exemptions available from senior executives. The budgets cover AI tokens, the units of data that models process.

The reported cuts come as Apple still wants to expand AI use across its operations, so they read as cost discipline rather than a retreat from AI.

Separate reports said Apple is also starting its Apple Intelligence rollout in China. The company did not immediately comment on the budget report, and the trend of firms scrutinizing AI costs after encouraging broad adoption is widespread.

Rebound From a Post-Earnings Dip Over Margin Worries

Apple designs and sells the iPhone, Mac, iPad and wearables, supported by an ecosystem of software and services, with about 166,000 employees under Chief Executive John Ternus.

The rally follows a dip after Earnings tied to a gross margin forecast of 45% to 46%, pressured by memory costs, and slower Services growth. Services remains the profit engine, with roughly 75% gross margin against about 37% for products, and fiscal 2025 Revenue was about $416 billion, with the iPhone contributing about half.

Services spans the App Store, iCloud, AppleCare, advertising, Apple Music, Apple TV, Apple Pay and Apple Card, and its high margins mean even modest growth shifts in that line move overall profitability.

Analysts are split. Bernstein raised its target to $380, while DZ Bank downgraded the stock to Sell with a $300 target, below the current price.

A 37.8 Times Multiple Raises the Bar After a Record Close

The wider tape shows the same split. Defense and data center stocks fell on fears of budget and construction limits, while housing, airlines and consumer staples rallied on an affordability trade, and Palantir (NASDAQ:PLTR) shed nearly 3%.

The stock trades at 37.80 times forward earnings and 39.27 times trailing earnings, with a Dividend Yield of 0.30%. The 52-week range runs from $243.42 to $354.47, so the shares have gained roughly 45% from their low.

Revenue concentration matters too, because the iPhone brings in about half of sales and product cycles and memory costs flow through quickly.

Bears point to the multiple and to memory costs, while supporters point to Services mix and the company’s restrained AI spending.

The net takeaway is that investors are paying a premium for a company seen as insulated from AI Capital spending, while memory costs and Services growth remain the debated numbers. The next things to watch are any further AI budget moves, the pace of the China rollout and whether margin guidance holds.