Is Apple the Ultimate Stock to Buy Right Now?

Apple (NASDAQ: AAPL) has quietly been one of the better-performing stocks of 2026. It has risen about 25% so far in 2026, easily crushing the S&P 500's (SNPINDEX: ^GSPC) 14% rise. But the question is: Is it still a good stock to buy compared to other big tech names?

Want AI exposure? Apple doesn't have it

Part of the reason why Apple's stock has done so well so far this year is its lack of artificial intelligence (AI) exposure. While I personally think this is a bad strategy for Apple over the long term, not every investor does. The company is taking a very measured approach to AI, and in true Apple style, it's once again a late arrival to the party.

Apple has taken its time to launch AI features in its ecosystem, and only recently introduced generative AI to Siri, its virtual assistant. However, the model behind Siri AI isn't anything Apple developed in-house; it uses Google Gemini from Alphabet.

This decision could prove to be brilliant. After all, Apple has hardly spent anything on capital expenditures recently compared to Alphabet.

AAPL Capital Expenditures (TTM) data by YCharts

Alphabet has spent hundreds of billions of dollars on AI infrastructure and will continue to do so. Apple has spent practically nothing, and although it will need to pay to use Gemini, the cost of that over the next decade may not eclipse what Alphabet spent in a year on AI computing capacity. As a result, Apple may have a winning strategy here.

Furthermore, Apple may be developing a suite of AI products that it will offer on a monthly subscription basis. This would create a new revenue stream for Apple if users find the products worth paying for.

Once again, Apple would likely use someone else's AI model, so its operating costs would be only marginally higher than those of funding massive data centers itself. However, because Apple cannot control the capabilities of another firm's AI model, it may not be able to get exactly what it wants from AI.

We'll see how Apple adopts AI, but because it isn't spending big to build it out, investors have fallen in love with the stock again. While their enthusiasm for it isn't necessarily misguided, it has caused Apple stock to swell to a premium valuation.

The question is, does it deserve it?

Apple's stock isn't cheap

From a price-to-earnings ratio standpoint, Apple is by far the most expensive big tech stock, trading at nearly 40 times trailing earnings.

AAPL PE Ratio data by YCharts.

This is approaching some of the highest levels it has traded at in the past few years, which should raise a red flag for investors. If Apple gets too expensive, it could spend a few years trading sideways because its future growth has been priced in. In that case, it would be a less desirable stock to own.

Apple's fiscal 2027 has already started, which means when next fiscal year's results are used to price the stock, you're using 2028 projections. From a 2028 standpoint, Apple is still valued at a fairly expensive 31 times earnings.

AAPL PE Ratio (Forward 1y) data by YCharts.

This means that if Apple's stock price doesn't move from now until October 2028 and the company's results are in line with analysts' expectations, it would trade for about 31.5 times earnings. That's about where I'd expect an average big tech stock to trade, which means Apple has about two years' worth of growth priced into its stock.

That doesn't bode well for its medium-term returns, which makes it a stock to steer clear of. While I understand that Apple has become a popular pick because it hasn't spent much on AI, I think this trend has been overblown. Investors would be better off looking into AI investments with cheaper valuations compared to Apple.

Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.