This article first appeared on GuruFocus.

Wedbush analyst Dan Ives sees Apple (NASDAQ:AAPL) as a sleeper AI winner heading into 2026 and broader market cycle, favoring a measured, ecosystem-driven approach over headline-grabbing investments.

Ives put Apple alongside Microsoft (MSFT), Tesla (NASDAQ:TSLA), Palantir (NASDAQ:PLTR) and CrowdStrike (CRWD) as top AI picks, arguing modest, widely deployed AI upgrades could have outsized effects across billions of active devices.

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Unlike rivals that are rapidly building large AI datacenters or pushing consumer chatbots, Apple has emphasized integrating AI into existing products and services, keeping capital spending relatively restrained to protect margins and free cash flow.

Wedbush estimates that effective AI monetization may add material per-share value by supporting device refresh cycles, services revenue and pricing power.

Investors should weigh potential upside from AI-enabled features against execution risk and slower, more conservative spending, Ives says.

Apple has a massive pool of iOS devices, which means that it has scale, yet it needs to convert those features into actual cash.

Simply put, Ives regards the strategy of AI at Apple as a stable and incremental game, i.e. the company can leverage AI without sacrificing its cash flow.