The heaviest hitters of the AI trade cooled off in the final quarter of 2025. As we breeze through Santa Claus rally season (it seems to be on the table this year), the big question is what’s next for the AI trade. Undoubtedly, there’s still a lot of nerves out there over the latest wave of volatility, which may very well be the start of a painful, drawn-out move lower.
As to whether we’re in an AI bubble, though, remains a mystery. It’ll probably be the big question going into the new year. With a recent wave of relief powering hard-hit AI stocks higher in the last few sessions, it seems like AI fears might be in an even bigger bubble than the AI stocks themselves.
AI bubble or not, there’s still value in big tech
Either way, there’s no denying that there are questionable valuation metrics on more than a handful of AI innovators. In short, we’re closing off a great year with AI stocks and gold (as well as silver) on a high note, though things do seem to feel “toppy,” even though recent volatility has been shrugged off with the bull back in the driver’s seat. At this juncture, I think it’s a bit lazy to dismiss anything involved in the AI space as being a bubble.
You really don’t have to look far for decent valuations across the stack. Whether you’re interested in a “pick and shovels” kind of play with the GPU makers, or if you’re more into the data center buildout, there are still somewhat reasonable prices of entry to be had, especially with the names that are still down a great deal from their prior highs.
Of course, certain Magnificent Seven innovators may be some of the bigger, more obvious bargains in the AI scene today. And they might be skating to where the puck is going into 2026, as they invest in their own AI chip capabilities while looking to position themselves to profit from various emerging trends within AI.
Notably, the productization of AI and the hyper-personalization of AI could both effectively monetize the technology. In this piece, we’ll look at a “lukewarm,” underperforming mega-cap stock that’s well-positioned to seize such opportunities in the new year.
Apple
Apple (NASDAQ:AAPL | AAPL Price Prediction) is up a rather unimpressive 12% on the year. It’s an okay gain, but a market-tailing one nonetheless, with the S&P 500 up over 18%. Of course, shares of Apple have been a big winner if you bought at the post-Liberation Day lows. Still, Apple has not been all too magnificent, especially compared to some of its Mag Seven rivals, many of which investors would consider to be further along in AI.
In any case, Apple hasn’t really spent as much on AI as its peers, which might make the shares a relative outperformer once those inevitable AI corrections (or worse) hit. In a prior piece, I went as far as to say that Apple stock would be spared, even rewarded, if an AI spending bubble were to let out some of its air. With shares tumbling close to 5% after briefly hitting new highs of $286 per share, it seems like Apple shareholders need more time to digest the latest run-up.
The stock doesn’t appear cheap at more than 36.7 times trailing P/E. But, at the same time, 2026 has a ton to look forward to in AI (big Gemini-powered Siri update coming Spring 2026), new products (a home hub or wall tablet?), and beyond. Undoubtedly, it was mostly a boring, less eventful year for Apple in 2025, unless, of course, we’re talking about the heated sales of the iPhone 17, which surprised many.
Could Apple be the king of AI monetization?
As we go into 2026 with strength in iPhone sales intact and shares in a 5% “mini correction,” I think there’s a good setup to ring in the new year right. Personally, I’d look for that coming Siri update to serve as an example that AI can, in fact, lead to massive profits.
For Apple, it’ll probably be in the form of device sales, as a significant product update cycle looks to play out in 2026. If Apple’s AI sells while it keeps spending in check, perhaps Apple could rise as the king of AI monetization.
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