Retail Investors Exit Apple as AI Rivals Attract Capital

A notable divergence is emerging within the technology sector. As capital continues to flood into tech broadly, Apple is experiencing a counter-trend, with individual investors shifting billions away from the iPhone maker toward companies perceived as more direct plays on artificial intelligence. However, ahead of quarterly earnings, institutional analysts are bucking this retail sentiment, viewing the current share price weakness as a potential opportunity.

Despite the selling pressure from retail portfolios, major financial institutions are holding firm to their bullish outlooks. Goldman Sachs highlights a recovery in the crucial Chinese market, where recent iPhone shipments surged by 26%. Wedbush analyst Dan Ives has characterized 2026 as potentially "monumental" for the corporation, driven by its ongoing integration of AI capabilities.

All eyes are now on Apple's financial report scheduled for January 29. Market experts are anticipating earnings per share of $2.65 and revenue approximating $138 billion. This release will serve as a key test of whether the skepticism of retail investors is warranted or if the optimism of professional money managers proves correct.

Fundamental Concerns and a Potential AI Pivot

The skepticism is not solely driven by more attractive alternatives elsewhere; fundamental concerns also play a role. Citigroup recently issued a warning about rising costs for DRAM memory chips. Its analysts project a price increase of up to 50% for these components this year, which could pressure Apple's gross margins. In response, Citigroup reduced its price target for Apple from $330 to $315.

Furthermore, the company's AI strategy has long been an overhang on market sentiment, with many investors perceiving a lack of clear progress compared to rivals. A recently announced partnership with Alphabet to utilize the Gemini model for Siri and new cloud features, however, is being viewed by some as a potential long-awaited turning point.

Should investors sell immediately? Or is it worth buying Apple?

Billions in Outflows Highlight a Sector Rotation

Sentiment among small-scale investors has shifted markedly. Data from J.P. Morgan Equity Strategy reveals that since July 2025, retail investors have withdrawn a net total of approximately $4 billion from Apple. This contrasts sharply with the inflows seen at other technology giants.

Market observers interpret this movement as a clear sector rotation: capital is flowing out of shares perceived as sluggish and into firms regarded as more aggressive in the artificial intelligence arena.

A comparison of retail investor capital flows since July 2025:

• Nvidia: Net inflows of +$15 billion
• Tesla: Net inflows of +$6 billion
• Meta & Amazon: Each with net inflows of +$3 billion
• Apple: Net outflows of -$4 billion

This investor caution is reflected in the share price performance. The stock has declined by nearly 8% since the start of the year, with its closing price on Friday standing at $249.36.