Sectors Up Close: Apple has lost its innovation magic

AI skepticism is rising as investors question whether Silicon Valley’s big spending on AI will translate into durable earnings, according to a discussion with Peter Andersen, founder of Andersen Capital Management. He said investors are only now asking how much is being spent, how long results will take, and whether capital expenditures can turn into cash flows. Andersen warned that if frugality follows weak cash results, the market could overreact—resembling past overspending fears tied to the dot-com and fiber optic eras. He also argued consumers will likely find ways to use AI-enabled capacity, citing iPhone storage behavior, and noted attention will turn to Apple’s earnings for demand signals in its new foldable.