Apple (AAPL) hit a fresh all-time high at ~$277 last week — and right on cue, the “too expensive” chorus started up again. It’s a familiar refrain. Apple has rarely, if ever, been a bargain-bin stock. But time and again, the company justifies its premium.
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The latest Q3 results were another reminder of that consistency: Apple not only delivered solid numbers across the board, but management also pointed to what could be a firecracker of a Q4 — historically the company’s strongest quarter. That combination of present strength and confident forward guidance is precisely why I’m not eager to push back against the valuation.
Yes, the stock looks pricey on paper. However, when a company consistently executes at this level, the premium begins to appear more like a reflection of quality than an excess. For now, I’m staying Bullish.
A Tremendous Close To Fiscal 2025
Tim Cook and his team wrapped up Fiscal 2024 on a high note, with growth re-accelerating. Revenue rose 8% year-over-year to $102.5 billion while EPS climbed 13% to $1.85 for fiscal Q4. The mix was exactly what investors wanted.
On cue, iPhone sales increased 6%, Services rose 15% to a record $28.75 billion, and Mac sales grew 13% to $8.73 billion. Gross margin expanded to roughly 47.2%, while the Services engine posted a margin of ~75%, reminding us that Apple is a cash cow beyond its hardware. It has a sticky, high-margin ecosystem wrapped around it.
The iPhone 17 launch hit right in the quarter, and early read-throughs suggest it’s outrunning last year’s model by double digits in key markets. I also like how services showed solid momentum, with App Store, iCloud, AppleCare, Apple TV+, and payments all contributing to enviable unit economics.
The beautiful part of this flywheel is how devices seed Services, Services fatten margins, and margins fund everything from R&D to buybacks. In FY25 alone, Apple generated $112 billion in net income and repurchased approximately $90.7 billion in stock, which, of course, was another silent driver of EPS growth.
Why December Could Go From Big To “Best Ever”
In the meantime, management drew an unusually impressive outlook for the December quarter, seeing annual revenue growth of 10%–12%. This implies roughly $134–$136 billion in sales, which was way ahead of the street consensus of $132 billion. The tone was confident because the iPhone is poised for double-digit growth into the holidays, Services are growing in line with its strong FY25 pace, and a gross margin guide of 47%–48% is even achievable despite tariff headwinds. This last point effectively undermined the bear case.
I find it pretty encouraging how the iPhone 17 cycle has better launch traction than last year’s series in several core markets. Pricing has remained disciplined, and the company’s services stack continues to compound on a larger installed base. Note that Apple did flag tariff costs (roughly $1.4 billion), but still guided to elite margins, which indicates the significant leverage that the Services and premium hardware mix are delivering. Also, if Apple is so far behind in the AI game, as most seem to agree, imagine how sales and profits could develop as monetization begins on that front as well.
Premium Valuation, Premium Company
The reality is that at roughly 32x forward earnings, Apple isn’t a cheap stock, and investors will have to buy close to the high to get on board. In all honesty, the stock hasn’t been “good value” for years. Still, there’s a reason the market consistently rewards the company with a premium multiple. Apple has built one of the most reliable cash-generating machines in corporate history. Its Services segment alone now generates more than $100 billion in annual revenue, with gross margins of about 75% in the latest quarter.
It’s a software-like annuity layered on top of a global hardware ecosystem that renews every fall and fuels cross-selling throughout the year. Companies with that kind of recurring, high-margin growth rarely trade at bargain valuations.
That said, a valuation pullback is always possible. But Apple’s massive buyback program — nearly $91 billion in FY25 — combined with a loyal shareholder base and consensus estimates calling for double-digit EPS growth in the medium term, all suggest that holding the stock remains the more rational move than trying to time it. Even Warren Buffett’s decision to cut Berkshire Hathaway’s Apple position in half last year hasn’t paid off — shares have climbed roughly 28% since
Is AAPL Stock a Buy, Sell, or Hold?
Wall Street remains relatively bullish on Apple, with the stock carrying a Moderate Buy consensus rating based on 21 Buy, 12 Hold, and two Sells ratings over the past three months. Moreover, AAPL’s average stock price target of $287.14 suggests 6.2% upside over the next 12 months.
Apple’s Premium Is Earned, Not Exaggerated
Apple’s fiscal Q4 once again underscored why the stock continues to command a premium valuation. The company closed its fiscal year with accelerating growth, record margins, and a potent mix of products and services that reinforce its exceptional cash-generation engine. With management guiding for double-digit revenue gains into the December quarter and maintaining elite profitability despite tariff headwinds, Apple’s momentum appears well-positioned to carry into the new year.
The stock does trade at a rich multiple — but that premium reflects a fortress balance sheet, a rapidly expanding high-margin Services ecosystem, and unmatched brand loyalty. As Apple enters fiscal 2025 with strong execution and clear operational momentum, staying bullish seems far more rational than betting against one of the most consistently dominant companies in the market.