After years of excitement driven by the artificial intelligence (AI) boom, technology stocks are getting clobbered. The tech-heavy Nasdaq-100 index is down about 3% year to date, and 4.5% in the past five days. Major AI hyperscalers like Alphabet, Amazon, Meta Platforms, and Microsoft have all lost value in the past five days, with Microsoft down more than 10%.

Investors are getting skittish about AI stocks because of the huge capital expenditures they are laying out to build AI data centers. For example, Alphabet announced strong fourth-quarter earnings on Feb. 4, with a 30% year-over-year increase in net income. But its stock dropped the next day. Investors apparently are concerned about Alphabet’s plans to spend $175 billion to $185 billion on capex in 2026. That would be more than Alphabet’s entire net income for 2025 ($132 billion).

An even bigger downturn is hitting software-as-a-service (SaaS) companies. The iShares Expanded Tech Software ETF, which has software majors like Microsoft, Salesforce, and ServiceNow in its portfolio, is down about 25% year to date.

The overall narrative about these software stocks is that new AI tools are becoming so powerful that they might be able to replace the products that most enterprise software-as-a-service (SaaS) companies sell, or seriously disrupt their business models. Commentators are calling this tech sell-off the “SaaSpocalypse.”

But one prominent tech stock has so far avoided the worst of this downturn. Apple (AAPL 1.40%) is up 1.5% year to date, and up 36% in the past six months, strongly outperforming the Nasdaq-100 and the S&P 500 indexes.

Here are two big reasons why Apple stock is avoiding the AI-driven SaaSpocalypse.

Today’s Change

(-1.40%) $-3.89

Current Price

$273.97

Apple is generating strong growth

On Jan. 29, Apple reported impressive earnings for its fiscal 2026 first quarter. The company achieved a 16% year-over-year increase in quarterly revenue and an 18% increase in diluted earnings per share. Net income was $42.1 billion for the quarter, up about 16% from the previous year.

In a press release, CEO Tim Cook said that the iPhone had its “best-ever quarter driven by unprecedented demand, with all-time records across every geographic segment.” Apple’s services segment also achieved record revenue, up 14% year over year.

Image source: Getty Images.

Apple is a hardware company, not an “AI stock”

Unlike some big tech companies that are spending hundreds of billions of dollars on new data centers, Apple has held itself apart from the AI frenzy. This company doesn’t sell AI hype; it sells hardware. About 60% of its net sales came from the iPhone in the latest quarter.

Earlier in 2025, Apple was widely criticized for not having a robust enough AI strategy. Its latest updates to Siri and Apple Intelligence were disappointing even to many longtime Apple fans. But Apple only spent $12.7 billion on capital expenditures in its most recent fiscal year — a small fraction of what Alphabet intends to spend in 2026.

Unless new advances in AI make people no longer want to buy iPhones, it appears that Apple is poised for continued success. This stock could be a good pick to thrive beyond any AI bubble or SaaSpocalypse.