Preheat the oven to 325 degrees F (165 degrees C). Grease and flour a 9- or 10-inch tube pan (such as Bundt).

Beat sugar and butter together in a bowl with an electric mixer until light and fluffy; beat in eggs, then beat in water and vanilla extract. Whisk flour, cocoa powder, baking soda, cinnamon, and nutmeg together in a separate bowl until well mixed; beat into sugar mixture just to combine. Stir in apples and chocolate chips until evenly distributed. Pour batter into the prepared pan.

Bake in the preheated oven until a toothpick inserted near center comes out clean, about 1 hour and 15 minutes. Cool on a wire rack.