Artificial intelligence is changing the landscape in the technology sector. So, as Tim Cook gets set to retire from the CEO spot at Apple (NASDAQ: AAPL) on Sept. 1, investors should probably anticipate some change. But will the stock’s performance follow the trend set by Amazon (NASDAQ: AMZN), which has underperformed since Jeff Bezos stepped down as CEO?
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
What happened to Amazon?
Jeff Bezos helped turn Amazon into an industry-leading technology company, taking it from an e-commerce disruptor selling books to a diversified technology services company. There’s no question that he was an important figure at the company. However, he stepped down as CEO in mid-2021. Since that point, Amazon’s stock has been a laggard.
As the chart below highlights, Amazon’s roughly 50% price advance is well behind the over 100% gain of the Nasdaq-100 and the roughly 90% rise in the S&P 500 index (SNPINDEX: ^GSPC), as of this writing. To be fair, Bezos was at the helm while the company was still a relatively small business, so growth was much easier to achieve. Today, Amazon is a $2.8 trillion market cap technology giant. It is much harder to grow a large business, as it often requires massive capital investments.
That, of course, is showing up in the artificial intelligence (AI) spending underway today. AI really only started to take off after Bezos stepped aside. Although there is massive spending across the industry, Amazon alone is expected to invest $220 billion in 2026. While the now-giant Amazon hasn’t kept up with the broader market, it has continued to cement its position as an industry leader. This dynamic is important to keep in mind as you consider Tim Cook’s departure from Apple.
Tim Cook is stepping aside as the AI race heats up
Could Apple underperform after Tim Cook leaves? Yes, and the timing of his exit is important because it coincides with the world’s big AI technology transition. Under Cook, Apple hasn’t taken as aggressive a stance in the AI race, focusing on using AI to enhance its products rather than trying to be a hyperscaler like Amazon, which is building massive AI data centers. That’s the path he’s laid out for his successor, but it is too early to know if it is a good or bad direction.
The benefit for Apple is that it isn’t spending as heavily on AI infrastructure as its technology competitors. The risk is that Apple ends up left behind in a fast-developing market. Right now, given that Apple’s stock is trading within 10% of its all-time high, it seems like investors like the plan. Indeed, there is increasing concern about the amount of money being spent on AI infrastructure by companies like Amazon. But investor enthusiasm for Apple’s approach could quickly shift in a highly competitive industry as the AI space continues to evolve.
