Savvy investors know that growth isn't everything. After all, if a company grows but earns subpar returns on capital, that can actually destroy shareholder value. This is why return on invested capital (ROIC) is such an important metric, favored by the likes of Warren Buffett and his late partner, Charlie Munger .
Currently, there's a big debate as to whether the massive investments in artificial intelligence (AI) infrastructure will generate their anticipated payoff. In their first-quarter earnings reports, most tech giants noted a massive increase in capital expenditures for AI infrastructure. Except for Buffett's largest stock, Apple ( AAPL -1.
62% ) . In fact, Apple's capital expenditures went down in the six months ended March 30 relative to the previous year. That is not to say that Apple is shying away from AI.
It's just that Apple has a big competitive advantage that allows it to pursue AI services more efficiently than others. Apple Intelligence uses Apple's homegrown models..
.to a point At its developers conference on June 10, Apple revealed Apple Intelligence , a slew of AI capabilities it's infusing into its products. Not much at the conference seemed revolutionary, but many services appeared very practical, such as an enhanced Siri assistant, quick retrieval of information and/or photos in the iPhone via voice command, summarization capabilities in Notes, and other time-saving tools.
Most of these new applications can be handled on the devices themselves, powered .
