Apple Decouples From Nasdaq, Offers Alternative to AI-Fueled Volatility

It’s been nearly 20 years since Apple Inc. was this untethered from its tech peers, giving investors an appealing alternative to the artificial intelligence (AI)-fueled volatility that has gripped much of the stock market in recent weeks, Ryan Vlastelica reported for Bloomberg News.

Apple's correlation with the benchmark has been declining since May, when it reached 0.92. (Photo: Phillip Capper, Wikimedia Commons)

Apple’s 40-day correlation to the Nasdaq 100 Index fell to 0.21 last week, the lowest level since 2006, according to data compiled by Bloomberg.

Its correlation with the benchmark has been declining since May, when it reached 0.92, as Apple’s decision to largely sit out the AI arms race has turned it into an outlier compared with many of its rivals.

A correlation of 1 means two securities move in perfect unison, while a reading of -1 signals they move in opposite directions.

“Apple’s lack of correlation is 100% a positive right now,” said Art Hogan, who oversees $25 billion as chief market strategist at B. Riley Wealth.

“We’re in an environment of AI whack-a-mole, where investors are so nervous about what will be disrupted next that they’re shooting first and asking questions later.”

For more than a month, investors have found themselves in an AI-fueled “doom loop,” flip-flopping between fears that the hundreds of billions of dollars being spent on AI will not pay off and concerns that industries ranging from software to wealth management and logistics could be rendered obsolete by the same technology.