Apple (AAPL) AI Stock Analysis

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Apple

(NASDAQ:AAPL)

82Outperform

Apple's overall stock score of 82 reflects strong financial performance and positive earnings call sentiment, balanced by technical indicators suggesting caution and a high valuation relative to earnings. The company's robust profitability and strategic investments provide a solid foundation for growth, despite headwinds from tariffs and currency challenges. Investors should be mindful of market conditions and valuation when considering Apple for their portfolios.

Positive Factors

AI Integration

Apple is in discussions with multiple AI providers to add AI search features to Safari, showing an effort to innovate and reduce reliance on Google.

Product Innovation

IPhone specification upgrades are expected to drive a higher premium model mix, enhancing earnings growth as gross margins expand.

Semiconductor Design

Apple has made significant progress in semiconductor design, particularly with the M1 chip, improving performance and strengthening its competitive edge.

Negative Factors

Consumer Sentiment

Delays in the launch of Apple's in-house LLM could adversely affect consumer sentiment and iPhone growth.

IPhone Sales Decline

Apple's iPhone sales in China have declined by 17% year-over-year due to intense competition from local brands and delayed iOS user upgrades.

Legal Challenges

Recent legal losses could pressure US App Store take rates and changing search habits/regulatory forces threaten Apple's digital advertising revenue, putting Apple's highest-margin Services businesses more at-risk than ever before.

Apple (AAPL) vs. S&P 500 (SPY)

Market Cap

$3.16T

Dividend Yield0.47%

Average Volume (3M)66.82M

Price to Earnings (P/E)33.0

Beta (1Y)1.07

Revenue Growth4.91%

EPS Growth-0.36%

CountryUS

Employees164,000

SectorTechnology

Sector Strength76

IndustryConsumer Electronics

Share Statistics

EPS (TTM)1.65

Shares Outstanding14,935,826,000

10 Day Avg. Volume54,056,295

30 Day Avg. Volume66,820,306

Financial Highlights & Ratios

PEG Ratio16.08

Price to Book (P/B)44.54

Price to Sales (P/S)0.00

P/FCF Ratio30.09

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue1.93

Enterprise Value/Gross Profit16.25

Enterprise Value/Ebitda5.58

Forecast

1Y Price Target

$228.65

Price Target Upside8.23% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering29

Apple Business Overview & Revenue Model

Company DescriptionApple Inc. (AAPL) is a leading multinational technology company headquartered in Cupertino, California. The company designs, manufactures, and markets a wide array of consumer electronics, software, and services. Apple's core products include the iPhone, iPad, Mac computers, Apple Watch, and Apple TV. Additionally, Apple provides a range of services such as the App Store, Apple Music, iCloud, and Apple Pay, creating a comprehensive ecosystem for its users.

How the Company Makes MoneyApple Inc. generates revenue through a combination of product sales and services. The majority of its income comes from hardware sales, particularly the iPhone, which consistently contributes the largest portion of its total revenue. Other significant hardware sources include the Mac, iPad, and wearables like the Apple Watch. Beyond hardware, Apple has been increasingly focusing on its Services segment, which includes revenue from the App Store, Apple Music subscriptions, iCloud storage services, AppleCare, and Apple Pay. This diversification into services has provided a steady, recurring revenue stream that complements its hardware sales. Additionally, Apple's ecosystem strategy encourages consumer loyalty and cross-product usage, further driving sales and service revenue. Strategic partnerships, such as with telecommunications companies for iPhone distribution, also play a crucial role in expanding Apple's market reach and boosting sales.

Apple Key Performance Indicators (KPIs)

Any

Global Active Devices

Global Active Devices
Tracks the number of Apple devices actively in use worldwide, reflecting customer adoption, brand stickiness, and potential for recurring service revenue.

Chart InsightsApple's global active devices have grown steadily, reaching 2.35 billion, reflecting strong ecosystem engagement. The earnings call highlights record revenue and growth in services and emerging markets, underscoring Apple's strategic focus on expanding its installed base. Despite challenges in China and a decline in wearables revenue, the robust increase in active devices suggests sustained customer loyalty and potential for future revenue growth, particularly in services. The company's anticipation of continued growth in the March quarter, despite foreign exchange headwinds, indicates confidence in its diversified product and service offerings.

Data provided by:

Main Street Data

Apple Financial Statement Overview

Summary

Apple's financials are strong, with high profitability and efficient cash flow. The Income Statement scores highly due to robust margins and profitability, though there's a slight revenue growth slowdown. The Balance Sheet reflects moderate leverage with impressive ROE, while the Cash Flow is healthy despite a minor decline in free cash flow.

Income Statement

Very Positive

Apple demonstrates strong financial performance with robust profitability metrics. The Gross Profit Margin for TTM (Trailing-Twelve-Months) is 46.6%, indicating effective cost management. The Net Profit Margin stands at 25.3%, showcasing exceptional profitability. Revenue Growth for the TTM is 2.39%, slightly below historical trends, but still positive. The EBIT and EBITDA Margins are 31.8% and 34.8% respectively, illustrating operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet is solid, with a Debt-to-Equity Ratio of 1.47, indicating moderate leverage. Return on Equity (ROE) is an impressive 151.7%, highlighting efficient use of shareholders' equity to generate profits. The Equity Ratio is 20.2%, suggesting a balanced capital structure but slightly low equity compared to assets, signaling potential risk if liabilities increase.

Cash Flow

Very Positive

Apple's cash flow generation is robust. The Operating Cash Flow to Net Income Ratio is 1.08, reflecting strong cash generation relative to income. The Free Cash Flow Growth Rate is slightly negative at -3.97% compared to the previous period, yet Free Cash Flow remains substantial at $104.5 billion. The Free Cash Flow to Net Income Ratio is 1.03, indicating healthy cash flow supporting earnings.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
400.37B	391.04B	383.29B	394.33B	365.82B	274.51B
	Gross Profit
186.70B	180.68B	169.15B	170.78B	152.84B	104.96B
	EBIT
127.36B	123.22B	114.30B	119.44B	108.95B	66.29B
	EBITDA
138.87B	134.66B	125.82B	130.54B	120.23B	77.34B
	Net Income Common Stockholders
97.29B	93.74B	97.00B	99.80B	94.68B	57.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
48.50B	65.17B	61.55B	48.30B	62.64B	90.94B
	Total Assets
331.23B	364.98B	352.58B	352.75B	351.00B	323.89B
	Total Debt
98.19B	106.63B	111.09B	132.48B	136.52B	122.28B
	Net Debt
70.02B	76.69B	81.12B	108.83B	101.58B	84.26B
	Total Liabilities
264.44B	308.03B	290.44B	302.08B	287.91B	258.55B
	Stockholders Equity
66.80B	56.95B	62.15B	50.67B	63.09B	65.34B
Cash Flow		Free Cash Flow
98.49B	108.81B	99.58B	111.44B	92.95B	73.36B
	Operating Cash Flow
109.56B	118.25B	110.54B	122.15B	104.04B	80.67B
	Investing Cash Flow
14.03B	2.94B	3.71B	-22.35B	-14.54B	-4.29B
	Financing Cash Flow
-129.34B	-121.98B	-108.49B	-110.75B	-93.35B	-86.82B

Apple Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price211.26

Price Trends

50DMA

208.23

Positive

100DMA

223.41

Negative

200DMA

225.69

Negative

Market Momentum

MACD

0.70

Negative

RSI

54.98

Neutral

STOCH

89.08

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAPL, the sentiment is Neutral. The current price of 211.26 is above the 20-day moving average (MA) of 205.60, above the 50-day MA of 208.23, and below the 200-day MA of 225.69, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 54.98 is Neutral, neither overbought nor oversold. The STOCH value of 89.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AAPL.

Apple Risk Analysis

Apple disclosed 28 risk factors in its most recent earnings report. Apple reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Apple Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOGL	85 Outperform	$2.02T	18.53	34.79%	0.48%	13.02%	37.73%
MSFT	84 Outperform	$3.38T	35.10	33.61%	0.69%	14.13%	12.10%
AAPL	82 Outperform	$3.16T	32.97	138.02%	0.47%	4.91%	-0.36%
SONY	79 Outperform	$151.15B	19.94	14.32%	0.37%	1.77%	18.85%
DELL	70 Outperform	$79.69B	17.90	-179.12%	1.63%	7.84%	42.63%
IBM	68 Neutral	$247.93B	45.89	21.91%	2.50%	1.23%	-33.87%
HPQ	63 Neutral	$27.64B	10.54	84.33%	3.85%	1.03%	-18.56%
Sector *	60 Neutral	$11.59B	10.44	-7.23%	2.94%	7.46%	-10.66%

* Technology Sector Average

Performance Comparison

AAPL

Apple

211.26

21.11

11.10%

GOOGL

Alphabet Class A

166.19

-9.89

-5.62%

HPQ

29.32

-1.42

-4.62%

IBM

International Business Machines

266.76

101.84

61.75%

MSFT

Microsoft

454.27

32.17

7.62%

SONY

Sony Group

24.68

8.02

48.14%

DELL

Dell Technologies

114.19

-28.75

-20.11%

Apple Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q2-2025)

% Change Since: -0.84%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with significant revenue and EPS records, along with strong growth in services, iPad, and Mac revenues. However, these positives were tempered by challenges in Wearables, Home, and Accessories, tariff-related costs, and a decline in China revenue. Despite these challenges, Apple's expansion plans in the U.S. and the performance of the iPhone 16 family provide optimism for future growth.

Q2-2025 Updates

Positive Updates

Record Revenue and EPS

Apple reported $95.4 billion in revenue, up 5% from a year ago, and a March quarter record diluted EPS of $1.65, up 8% year-over-year.

All-Time Services Revenue Record

Services achieved an all-time revenue record of $26.6 billion, up 12% from the prior year, with strong performance across all categories.

Growth in iPad and Mac Revenue

iPad revenue was $6.4 billion, up 15% year-over-year, and Mac revenue was $7.9 billion, up 7% year-over-year.

Expansion Plans in the U.S.

Apple announced plans to spend $500 billion over the next four years in the U.S., expanding teams and facilities in several states and opening a new factory in Texas.

iPhone Revenue Growth

iPhone revenue was $46.8 billion, up 2% year-over-year, with the iPhone 16 family contributing to the growth.

Negative Updates

Decline in Wearables, Home and Accessories Revenue

Revenue for Wearables, Home and Accessories was $7.5 billion, down 5% year-over-year.

Challenges Related to Tariffs

Tariffs are expected to add $900 million to costs in the June quarter, with uncertainty about future tariff impacts.

Impact of Foreign Exchange Headwinds

Foreign exchange headwinds negatively impacted revenue growth by approximately 2.5 percentage points.

China Revenue Decline

Revenue in China declined 2% year-over-year, with geopolitical tensions and foreign exchange impacting results.

Company Guidance

During the Apple Q2 Fiscal Year 2025 earnings call, Apple reported revenue of $95.4 billion, a 5% increase year-over-year, and a diluted EPS of $1.65, an 8% increase from the previous year. Services achieved an all-time revenue record of $26.6 billion, growing 12% compared to the prior year. iPhone revenue reached $46.8 billion, up 2% year-over-year, while Mac revenue was $7.9 billion, a 7% increase. iPad revenue rose 15% to $6.4 billion. However, revenue from Wearables, Home, and Accessories declined by 5% to $7.5 billion. The company also announced plans to invest $500 billion in the U.S. over the next four years, including expansion of facilities across several states and opening a new factory for advanced server manufacturing in Texas. Additionally, Apple expects to source over 19 billion chips domestically during calendar year 2025. The company is navigating potential costs from tariffs, estimating a $900 million impact for the June quarter, while continuing to focus on innovation and long-term growth.

Apple Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Apple Completes $4.5 Billion Notes Issuance

Neutral

May 12, 2025

On May 12, 2025, Apple Inc. completed the issuance and sale of $4.5 billion in aggregate principal amount of notes with varying maturity dates from 2028 to 2035. These notes, issued under an underwriting agreement with major financial institutions, represent senior unsecured obligations and are part of Apple’s strategy to manage its debt portfolio, potentially impacting its financial flexibility and stakeholder interests.

The most recent analyst rating on (AAPL) stock is a Hold with a $211.00 price target. To see the full list of analyst forecasts on Apple stock, see the AAPL Stock Forecast page.

Spark’s Take on AAPL Stock

According to Spark, TipRanks’ AI Analyst, AAPL is a Outperform.

Apple’s strong financial performance and positive earnings call are key strengths, supported by high profitability and growth in key segments. However, technical indicators suggest caution, and the stock’s high valuation could limit upside. Challenges in wearables and potential tariff impacts are notable risks.

To see Spark’s full report on AAPL stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.