Apple Rises 20% in a Year: Is There More Room for the Stock to Grow?

Apple AAPL shares have appreciated 19.6% over the trailing 12-month period, which can be attributed to improving prospects post iPhone 17 launch. Since the introduction of the latest series on Sept. 9, AAPL shares have jumped roughly 17%. Early data points from Counterpoint research suggested that the iPhone 17 series outsold the iPhone 16 series by 14% in its first 10 days of availability in China and the United States. Apple is benefiting from the growing adoption of Apple Intelligence that is infused across iPhone, Mac and iPad.However, is this share price momentum sustainable, given the myriad of headwinds that AAPL is facing? Let’s find out.Can Strong iPhone 17 Shipment Aid Sales Growth?The updated iPhone portfolio is expected to boost iPhone sales, which increased 6.1% year over year to $49.03 billion and accounted for 47.8% of fourth-quarter fiscal 2025 total sales. For fiscal 2025, iPhone sales ($209.59 billion) accounted for roughly half of the total sales ($416.16 billion) and climbed up 4.2% from fiscal 2024, better than the flat growth in 2024 from 2023 and a decline of 2% in 2023 from 2022. The popularity of the iPhone 16 series drove sales in fiscal 2025 despite facing stiff competition from Chinese vendors and Samsung, headwinds related to Apple Intelligence, and tariff issues, which are concerns for Apple.Apple now expects the December quarter’s (first-quarter fiscal 2026) iPhone sales to grow in double digits year over year. However, iPhone Air, Apple’s thinnest iPhone (5.6 mm) ever, has failed to ignite sales, which is expected to dampen some of this growth projection. Apple has now reportedly delayed the launch of next year’s iPhone Air.Mac and iPad Portfolio Overhaul to Aid AAPL’s ProspectsApple updated its Mac and iPad portfolio with the launch of the M5 chip-powered 14-inch MacBook Pro and the new 11-inch and 13-inch iPad Pro, respectively. While the iPad Pro with M5 chip runs on iPadOS 26, the new 14-inch MacBook Pro features macOS Tahoe. The new iPad Pro delivers up to 3.5 times the AI performance of the previous generation, and is up to 5.6 times faster compared to iPad Pro with M1 chip, thanks to a next-generation GPU with a Neural Accelerator in each core. The new MacBook Pro delivers up to 3.5 times faster AI performance than the previous generation, and is up to six times faster compared to the 13-inch MacBook Pro with M1.Mac and iPad accounted for 8.1% and 6.7% of Apple’s fiscal 2025 net sales and jumped 12.4% and 5%, from 2024. Apple expects Mac to face a tough year-over-year comparison in the first quarter of fiscal 2026. The company is facing stiff competition from the likes of Lenovo, Dell Technologies and HP in the PC domain.Strong Services Momentum to Aid AAPL’s Top LineThe Services business benefits from an expanding base of installed devices. Apple’s Services segment benefits from an expanding games portfolio and the growing popularity of Apple TV+. Apple’s strategy of adding new games on a continuous basis is driving its user base. Apple Arcade currently offers more than 200 games. Apple TV+ won 22 Emmys at the 77th Primetime Emmy Awards, best-ever in the streaming service’s history, driven by The Studio, Severance and Slow Horses. Apple TV+ achieved a record-breaking 81 Emmy nominations this year, spanning 14 original titles.Can AAPL Shares Continue the Upward Momentum?Apple shares lag the broader Zacks Computer and Technology sector that has returned 27.7% in the trailing 12 months. When compared with its AI competitors, AAPL has underperformed Alphabet GOOGL shares over the same time frame but outperformed Amazon AMZN and Microsoft MSFT. Alphabet, Microsoft and Amazon shares have appreciated 58.7%, 12.4%, and 17.8%, respectively.AAPL Stock’s Performance Image Source: Zacks Investment Research Apple shares closed at $272.95 on Nov. 13, very close to the 52-week high of $277.32 it hit on Oct. 31. AAPL shares are now trading above the 50-day and 200-day moving averages, indicating a bullish trend.AAPL Trades Above 50-day & 200-day SMAs Image Source: Zacks Investment Research Apple’s Fiscal Q1 Estimate Revision Shows Positive TrendThe Zacks Consensus Estimate for Apple’s first-quarter fiscal 2026 earnings has increased by 7.8% to $2.62 per share over the past 30 days, indicating 9.17% growth from the figure reported in the year-ago quarter.   Apple Inc. Price and Consensus Apple Inc. price-consensus-chart | Apple Inc. Quote The Zacks Consensus Estimate for Apple’s first-quarter fiscal 2026 revenues is pegged at $135.86 billion, indicating 9.3% growth over the figure reported in the year-ago quarter.AAPL Shares Are OvervaluedApple’s stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.AAPL is trading at a forward 12-month price/sales (P/S) of 8.96X compared with the sector’s 6.85X, Amazon’s 3.25X and Alphabet’s 8.84X. However, Microsoft’s P/S multiple 10.94X is higher than that of Apple.Apple Stock’s Valuation Image Source: Zacks Investment Research Here is Why Apple is a Hold Right NowApple’s iPhone sales are expected to benefit from the growing adoption of Apple Intelligence features. However, stretched valuation and stiff competition in the smartphone, PC and AI domains are concerning for prospective investors.AAPL currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. 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(AMZN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks