Apple (AAPL) AI Stock Analysis

• Market Cap: $3.71T
• Dividend Yield: 0.38%
• Average Volume (3M): 45.74M
• Price to Earnings (P/E): 23.9
• Beta (1Y): 1.13
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 164,000
• Sector: Technology
• Sector Strength: 88
• Industry: Consumer Electronics
• EPS (TTM): 2.84
• Shares Outstanding: 14,681,140,000
• 10 Day Avg. Volume: 38,323,943
• 30 Day Avg. Volume: 45,738,684
• PEG Ratio: 1.51
• Price to Book (P/B): 51.79
• Price to Sales (P/S): 9.18
• P/FCF Ratio: 38.66
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 8.68
• Enterprise Value/Gross Profit: 18.34
• Enterprise Value/Ebitda: 24.72
• 1Y Price Target: $304.66
• Price Target Upside: 20.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24
• EPS Forecast (FY): 8.48
• Revenue Forecast (FY): $463.77B

• Rating: 80 Outperform
• Price Target: $313.00 ▲(23.80% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by exceptional profitability and cash-flow strength, reinforced by upbeat earnings-call results and guidance. Offsetting factors are balance-sheet leverage risk and a premium valuation with a low dividend yield; technicals are supportive but not strongly momentum-driven.

Positive Factors

Elite profitability and cash generation

Very large and consistent operating and free cash flows, combined with industry-leading gross and net margins, provide durable funding for R&D, buybacks, dividends, and debt servicing. This cash conversion resilience supports strategic flexibility across economic cycles.

Large installed base and recurring services revenue

A >2.5B device installed base and mid-teens services growth drive recurring, higher-margin revenue streams and deepen customer lock-in. Durable monetization from the App Store, cloud and subscriptions smooths product cyclicality and supports long-term margin sustainability.

Strategic investments and partnership commitments

Large, multi-year capital commitments and strategic partnerships strengthen supply‑chain resilience and AI capabilities. Sustained domestic investment and foundation‑model collaboration position the company to control infrastructure, reduce geopolitical concentration risk, and scale new services.

Negative Factors

Elevated leverage on balance sheet

Higher leverage increases reliance on continued top-line and margin performance to maintain flexibility. In a downturn or margin compression scenario, elevated debt amplifies refinancing and coverage risk and constrains the ability to pursue opportunistic M&A or materially increase buybacks.

Advanced-node SoC supply constraints

Dependence on scarce advanced semiconductor capacity can structurally cap device shipments and impede growth until foundry capacity expands. Persistent node shortages raise execution risk for product rollouts and could force sustained mix/market-share tradeoffs in premium segments.

Rising R&D/AI expense and uncertain capacity needs

Sustained elevated OpEx for AI and platform initiatives can pressure operating leverage if revenue payoffs lag. Unclear cloud capacity and cost planning for Apple Intelligence raise execution and capital allocation risk, potentially delaying margin recovery from investments.

Apple Business Overview & Revenue Model

Company Description

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod. It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts, as well as advertising services include third-party licensing arrangements and its own advertising platforms. In addition, the company offers various subscription-based services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California.

How the Company Makes Money

Apple primarily makes money from selling hardware products and from services tied to its installed base of devices. (1) Product revenue: The largest portion of revenue historically comes from iPhone sales, with additional meaningful contributions from Mac and iPad, plus Wearables/Home/Accessories such as Apple Watch, AirPods, and other accessories. Apple sells these products through its own retail and online stores as well as third-party cellular network carriers, wholesalers, retailers, and resellers; channel mix and product upgrade cycles can materially affect results. (2) Services revenue: Apple generates recurring and transaction-based revenue from its Services segment, which includes the App Store (including commissions on paid apps and in-app digital goods sold via its marketplace where applicable), advertising, AppleCare (warranties and support), cloud and digital services such as iCloud, and subscription offerings including Apple Music, Apple TV+, Apple Arcade, Apple Fitness+, Apple News+, and bundled plans like Apple One. (3) Payments and licensing: Apple also earns revenue from payment-related and platform arrangements (e.g., Apple Pay-related ecosystem economics) and from licensing and other agreements associated with its software ecosystem. Overall, Apple’s earnings are supported by its integrated hardware-software-services ecosystem, which helps drive device sales, customer retention, and ongoing services monetization; significant distribution relationships (notably with cellular carriers and major retailers) and the scale of its installed base are key factors influencing revenue.

Apple Financial Statement Overview

Summary

Elite profitability and cash generation (TTM ~47% gross margin, ~27% net margin; operating cash flow ~$135B and FCF ~$126B with strong TTM FCF growth) support a high score. The main offset is higher leverage (elevated debt-to-equity and only moderate operating cash flow-to-debt coverage), which reduces balance-sheet flexibility if growth or margins soften.

Income Statement

Apple’s income statement is exceptionally strong. Revenue is growing again in TTM (Trailing-Twelve-Months) (+4.7%) after a softer FY2023, and profitability remains best-in-class with ~47% gross margin and ~27% net margin in both FY2025 and TTM. Operating profitability is also very high (EBIT margin ~32% in TTM), indicating strong pricing power and cost discipline. The main constraint on an even higher score is the relatively modest top-line growth rate versus earlier years, suggesting a more mature growth profile.

Balance Sheet

The balance sheet is solid but not without leverage considerations. Reported debt-to-equity is elevated (around 1.5x in FY2025/TTM, and higher in prior years), which increases dependence on continued strong earnings and cash generation. Offsetting this, equity and assets remain sizable, and shareholder returns are very strong (return on equity well above 1.5x), reflecting excellent profitability. Key watch item: higher leverage leaves less flexibility if demand or margins weaken.

Cash Flow

Cash flow performance is very strong. TTM (Trailing-Twelve-Months) operating cash flow (~$135B) and free cash flow (~$126B) are exceptionally large, and TTM free cash flow growth is strong (+27.3%). Free cash flow is also well supported by earnings (free cash flow is ~0.89x of net income in FY2025/TTM), indicating good cash conversion. The primary weakness is that operating cash flow relative to total debt is moderate (~0.67x in FY2025/TTM), meaning leverage still matters despite robust cash generation.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	435.62B	416.16B	391.04B	383.29B	394.33B	365.82B
Gross Profit	206.16B	195.20B	180.68B	169.15B	170.78B	152.84B
EBITDA	152.98B	144.43B	134.93B	129.19B	133.14B	123.14B
Net Income	117.78B	112.01B	93.74B	97.00B	99.80B	94.68B
Balance Sheet
Total Assets	379.30B	359.24B	364.98B	352.58B	352.75B	351.00B
Cash, Cash Equivalents and Short-Term Investments	66.91B	54.70B	65.17B	61.55B	48.30B	62.64B
Total Debt	90.51B	112.38B	119.06B	123.93B	132.48B	136.52B
Total Liabilities	291.11B	285.51B	308.03B	290.44B	302.08B	287.91B
Stockholders Equity	88.19B	73.73B	56.95B	62.15B	50.67B	63.09B
Cash Flow
Free Cash Flow	123.32B	98.77B	108.81B	99.58B	111.44B	92.95B
Operating Cash Flow	135.47B	111.48B	118.25B	110.54B	122.15B	104.04B
Investing Cash Flow	517.00M	15.20B	2.94B	3.71B	-22.35B	-14.54B
Financing Cash Flow	-120.97B	-120.69B	-121.98B	-108.49B	-110.75B	-93.35B

Apple Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
META	81 Outperform	$1.59T	27.52	30.56%	0.32%	22.17%	-2.66%
AAPL	80 Outperform	$3.71T	23.95	159.94%	0.38%	―	―
MSFT	74 Outperform	$2.97T	23.36	33.61%	0.71%	16.67%	28.60%
GOOGL	71 Outperform	$3.69T	28.69	35.00%	0.26%	13.55%	34.26%
DELL	70 Outperform	$103.74B	13.34	-218.24%	1.45%	10.81%	31.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SONY	56 Neutral	$129.70B	-5.83	-2.62%	0.41%	-2.47%	6.49%

Apple Corporate Events

Apple Shareholders Reelect Board and Approve 2026 Proposals

Apple Inc. held its 2026 Annual Meeting of Shareholders on February 24, 2026, where investors re-elected all nominated directors, including CEO Tim Cook and Chair Art Levinson, to serve until the next annual meeting. Shareholders also approved the ratification of Ernst & Young LLP as the independent auditor for fiscal 2026 and passed an advisory vote in favor of the company’s executive compensation program.

Investors endorsed an updated Non-Employee Director Stock Plan, signaling support for Apple’s current approach to board compensation and governance. A shareholder proposal calling for a “China Entanglement Audit” failed to gain sufficient backing, indicating that a majority of shareholders were not prepared at this time to mandate additional scrutiny of Apple’s exposure to and operations in China via this specific measure.

The most recent analyst rating on (AAPL) stock is a Buy with a $350.00 price target. To see the full list of analyst forecasts on Apple stock, see the AAPL Stock Forecast page.

Apple appoints Ben Borders as principal accounting officer

Apple Inc. announced that its Board of Directors has appointed Ben Borders, 45, as Principal Accounting Officer effective January 1, 2026, as part of a previously disclosed transition plan, succeeding Chris Kondo in the role. Borders, who joined Apple in November 2010 and previously served as Director of Technical Accounting, assumed the position in January 2026, with the company noting that he has no disclosable family relationships or related-party transactions with Apple’s directors or executive officers under applicable regulations.

The most recent analyst rating on (AAPL) stock is a Sell with a $230.00 price target. To see the full list of analyst forecasts on Apple stock, see the AAPL Stock Forecast page.