Apple’s stock is behaving differently from the rest of BATMMAAN because its AI strategy is nowhere

Hey Siri: why is Apple’s stock behaving differently from the rest of Big Tech?

Siri, of course, will have absolutely no clue — because Apple’s AI strategy is borderline nonexistent.

Google’s AI efforts have gone from strength to strength. ChatGPT has grown its weekly active users to nearly 900 million. Nvidia briefly crossed a $5 trillion market cap. Apple, uh, released some underwhelming updates to its flagship Apple Intelligence product?

That said, its lack of AI progress is increasingly affecting how the stock is trading, as Apple becomes a sort of “anti-AI” vehicle for investors.

Indeed, its correlation with the rest of the BATMMAAN group has dropped precipitously: when ChatGPT was released at the end of November 2022, Apple’s average pairwise correlation (based on daily returns over 90-day rolling periods) to its Big Tech peers was 0.71 — recently it has dropped to as low as 0.2.

This is a pretty steep drop-off, and it’s been most pronounced in the stocks that are closest to the AI trade (notably Nvidia, Microsoft, and Broadcom). Apple and Microsoft used to trade nearly in tandem, with a correlation coefficient between the two north of 0.8. That has all but collapsed, with the last 90 trading sessions barely showing a positive correlation.

The Takeaway

Perhaps what’s most remarkable from mining the correlation stats is that Apple’s average correlation with the rest of its peer group is now the lowest of any BATMMAAN stock. People used to say that Tesla was the odd one out of the Big Tech giants — but the trading data suggests, fairly strongly, it’s Apple right now.

Last week, Apple retired its AI chief, potentially suggesting a renewed focus on the nascent technology under new leadership. In