Big Tech earnings are officially underway, and for many investors, Apple (AAPL) is the main event. The company is set to report its fiscal Q1 2026 results tomorrow after the closing bell, with expectations running high following what appears to have been a strong holiday quarter. Several analysts are even suggesting this could be a record-setting report.
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While concerns about Apple’s premium valuation are understandable, I see a business whose growth runway is far more compelling than AAPL bears give it credit for. Valuation aside, I remain firmly bullish on AAPL as it enters what could be its most consequential hardware and services pivot in the past decade.
iPhone 17 Ushers in Holiday Glow
On Thursday, we are potentially looking at Apple’s largest revenue jump in four years. If management’s guidance holds, revenue should land close to a record-shattering $137 billion to $139 billion. That’s a 10% to 12% year-over-year increase, which is obviously impressive for a multi-trillion-dollar behemoth that many perceive as a dinosaur in tech at this point.
The growth theme of this past holiday season was about the “upsell” of the iPhone, not just moving a big number of units. Specifically, the iPhone 17 lineup has seen a massive shift toward the higher-margin Pro and Pro Max models. It turns out that when you dangle the carrot of “Apple Intelligence” in front of a global audience, people are more than willing to pay the premium for the hardware that can actually run it properly. Older phones are due for an upgrade at this point, so it’s likely we’ll see many users moving from the iPhone 13, 14, and 15 to the iPhone 17.
Speaking of a global audience, the resilience in Greater China has proven the doomsayers wrong. Despite the constant geopolitical chatter and local competition, double-digit growth in that region is back on the menu. People forget that the Apple ecosystem is a status and a lifestyle in China that hasn’t lost its luster. Meanwhile, the Services division continues to maintain its double-digit trajectory and boost margins.
AI Partnerships, Siri, and the Foldable Frontier
Looking deeper into Fiscal 2026, the catalysts are starting to stack up. The big one on everyone’s mind is the Siri 2.0 relaunch. For years, Siri was pretty much unusable, and it still is if we’re being honest. The Google (GOOGL) Gemini deal is the real turning point. Apple is turning the iPhone into a legitimate AI agent by using those generative capabilities. This is exactly where the idea of charging for AI starts to feel tangible. We are looking at a world where your phone handles your entire life, and Apple will surely put a price tag on that premium experience.
Then there’s the hardware halo effect. Rumors of a foldable iPhone landing later this year are reaching a fever pitch. While competitors have been in the foldable space for years, Apple’s “wait-and-win” strategy usually pays off by perfecting the hinge and the software experience before the mass market arrives. Of course, the road isn’t without bumps. Surging DRAM and NAND memory prices have been a headache for everyone in tech, but Apple’s supply chain team has been working overtime.
In particular, I get the impression that their long-term supply agreements and massive purchasing power act as a shield against these rising component costs. This should allow them to maintain margin resilience while other phone manufacturers are likely to be forced to hike prices or eat the loss. Therefore, it looks like everything is lining up for Apple to have a true AI-driven supercycle, with hardware-integrated features compressing upgrade cycles from three years to potentially two.
AAPL Navigates the $8.27 EPS Landscape
I’ll give the bears one thing: the valuation is indeed rich. With Wall Street expecting EPS of $8.27 this fiscal year, the stock is trading at a P/E of roughly 31x. On a purely mathematical level, that’s definitely a lot to pay for a company that has lately grown top-line revenue in the high single digits (though we are looking at a potential acceleration). But this is Apple, a company with a fortress balance sheet and one of the deepest moats anyone can find worldwide.
In fact, the predictability of their growth is what earns it its premium. Some investors are likely underestimating how high the floor is here. Apple has serious pricing power with its Pro line, and the recurring revenue from Services is a massive safety net. On top of that, the potential for AI-driven upgrades remains largely untapped. Even if the entry price feels a bit steep today, double-digit EPS growth is likely to stick around well into the early 2030s.
Is AAPL a Buy, Sell, or Hold?
On Wall Street, AAPL stock carries a Moderate Buy consensus rating, based on 19 Buy, 11 Hold, and two Sell ratings. In addition, AAPL’s average stock price target of $298.84 implies ~16% upside potential over the next 12 months, suggesting analysts see Apple as undervalued despite its seemingly lofty valuation.
No One Should Doubt Apple Ahead of Earnings Day
I think tomorrow’s earnings report will make it clear that Apple still has plenty of runway ahead. The company is benefiting from powerful tailwinds, including a record-breaking holiday season and a major AI-driven product refresh on the horizon. That kind of momentum is hard to ignore. With an ecosystem built for durability and long-term growth, I remain decidedly bullish on the stock.