Apple’s AI Restraint Looks Smart as Microsoft Spends $190B on AI Despite User Pushback

Devendra Hardawar argues Apple (AAPL) is demonstrating discipline by moving slowly on AI while Microsoft (MSFT) accelerates spending.

Apple delivered $111.2B in March-quarter revenue and $30.976B in Services—all-time records—without AI-driven capital outlays.

Microsoft is boosting 2026 CapEx by $25B to $190B total as AI revenue hit $37B annually, but MSFT stock is down 14.11% YTD while AAPL is up 3.14%.

The analyst who called NVIDIA in 2010 just named his top 10 stocks and Apple wasn't one of them. Get them here FREE.

The narrative around Apple and AI has flipped. A year ago, Apple's restrained posture toward generative AI looked like a weakness. On the latest This Week in Tech podcast, host Leo Laporte and panelists Devendra Hardawar, Micah Sargent, and Nicholas DeLeon argued the patient approach now looks like discipline, especially set against Microsoft's accelerating capital outlays. As Hardawar explained, "Microsoft is pulling back on Copilot stuff. All these companies are kind of taking a second look at their AI investments. Apple can just sit tight and be slow about it."

Apple (NASDAQ:AAPL) reported $111.184 billion in revenue for the March quarter, up 16.6% year over year, with EPS of $2.01, beating the $1.94 consensus. iPhone revenue reached $56.994 billion, while Services hit a record $30.976 billion. The company also approved a $100 billion buyback and raised its dividend by 4%.

Additionally, Apple discontinued its $599 Mac Mini and raised the entry price to $799, while warning Mac Mini and Mac Studio "may take several months to reach supply-demand balance." DeLeon noted that shipping dates were "months in the future" because AI developers are buying hardware in bulk for cloud computing. Apple is collecting hardware revenue from the AI boom without funding the buildout itself.

Microsoft (NASDAQ:MSFT) is taking the opposite approach. Laporte reported the company is lifting its 2026 AI spend by $25 billion, taking total CapEx to $190 billion in 2026. The fiscal Q3 quarter alone carried $30.876 billion in capital expenditures, up 84.39% year over year. CEO Satya Nadella told investors the AI business "surpassed an annual revenue run rate of $37 billion, up 123% year-over-year."

The panel noted that customers are receiving "5 notifications every time you open your machine" tied to Microsoft’s AI features, and that the company had to "come out and say sorry for all the AI." Markets have reflected that tension. Microsoft shares are down 14.11% year-to-date through May 1, while Apple is up 3.14%.

In the near term, Apple is capturing AI-driven demand through its hardware ecosystem while keeping capital intensity low. Microsoft is investing aggressively to build the infrastructure layer of AI and absorbing the trade-offs that come with it. During a capital spending cycle, restraint carries its own advantage, but as the panel suggested, sitting tight may have a long-term cost.

This analyst's 2025 picks are up 106% on average. He just named his top 10 stocks to buy in 2026. Get them here FREE.