Apple (AAPL) AI Stock Analysis

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Apple

(NASDAQ:AAPL)

Rating:76Outperform

Price Target:

$228.00

▲(11.81%Upside)

Apple's overall score is primarily driven by its strong financial performance, highlighted by profitability and strategic growth in services. The earnings call provided a positive sentiment with significant revenue growth, offset by valuation concerns due to a high P/E ratio and technical analysis indicating potential bearish trends.

Positive Factors

Earnings Potential

If AAPL decided to aggressively pursue an advertising revenue stream, this could materially accelerate revenue and EPS growth.

Forecast Performance

The App Store is tracking ahead of the forecast, implying a potential upside in Services revenue.

Revenue Growth

US App Store revenue and monetization is accelerating, showing no impact from the injunction.

Negative Factors

Competition

Every Big Tech competitor wants to take AAPL's 15%-30% platform tax.

Regulatory Challenges

The United States Court of Appeals denied Apple's request to stay the implementation of zero-commission link-out payments.

Survey Risks

Survey shows 2% of Apple EPS is 'at-risk' if real-world behavior mimics survey work.

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

Market Cap

$3.05T

Dividend Yield0.49%

Average Volume (3M)51.70M

Price to Earnings (P/E)31.8

Beta (1Y)1.10

Revenue Growth4.91%

EPS Growth-0.36%

CountryUS

Employees164,000

SectorTechnology

Sector Strength83

IndustryConsumer Electronics

Share Statistics

EPS (TTM)1.65

Shares Outstanding14,935,826,000

10 Day Avg. Volume45,116,381

30 Day Avg. Volume51,699,481

Financial Highlights & Ratios

PEG Ratio16.53

Price to Book (P/B)45.78

Price to Sales (P/S)0.00

P/FCF Ratio30.93

Enterprise Value/Market Cap1.02

Enterprise Value/Revenue1.98

Enterprise Value/Gross Profit16.69

Enterprise Value/Ebitda5.73

Forecast

1Y Price Target

$228.79

Price Target Upside12.20% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering29

Apple Business Overview & Revenue Model

Company DescriptionApple Inc. (AAPL) is a leading global technology company that operates in the consumer electronics, computer software, and online services sectors. Founded in 1976 and headquartered in Cupertino, California, Apple is renowned for its innovative products including the iPhone, iPad, Mac computers, Apple Watch, and Apple TV. The company also offers a range of software and services, such as the iOS and macOS operating systems, the iCloud storage service, the Apple Music streaming service, and the App Store, which provides digital content and applications.

How the Company Makes MoneyApple makes money primarily through the sale of its consumer electronics products, with the iPhone being its most significant revenue generator. The company also earns significant revenue from its services segment, which includes digital content sales, subscriptions, and licensing. This segment encompasses the App Store, Apple Music, iCloud, Apple TV+, and other services that leverage Apple's ecosystem of devices. Additionally, Apple generates revenue from sales of Mac computers, iPads, and wearables like the Apple Watch and AirPods. The company's retail operations, both online and through physical Apple Stores, also contribute to its earnings. Furthermore, Apple has strategic partnerships with various companies to enhance its product offerings and expand its service reach, further bolstering its revenue streams.

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 Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q2-2025)

% Change Since: -4.28%|

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 Financial Statement Overview

Summary

Apple's financial performance is robust, marked by high profitability and efficient cash flow management. Despite high leverage, the company maintains excellent returns for shareholders. The income statement highlights strong margins and revenue growth, reinforcing Apple's leadership in the industry.

Income Statement

Very Positive

Apple's income statement shows robust financial health with strong profitability metrics. The TTM (Trailing-Twelve-Months) gross profit margin stands at 46.64%, indicating efficient production and pricing strategy. The net profit margin is 24.30%, reflecting effective cost management and operational efficiency. Revenue growth of 2.39% from the previous period shows consistent upward momentum, albeit at a moderated pace. The EBIT and EBITDA margins are healthy at 31.82% and 34.68%, respectively, demonstrating solid core business performance. Overall, Apple's income statement reflects strong profitability and controlled growth, reinforcing its leadership in the consumer electronics industry.

Balance Sheet

Positive

Apple's balance sheet presents a mixed picture of financial stability and leverage. The debt-to-equity ratio is 1.47, indicating a relatively high level of leverage which could pose risks if not managed carefully. However, the return on equity (ROE) is an impressive 145.66%, showcasing exceptional returns for shareholders. The equity ratio of 20.16% suggests a modest proportion of equity financing relative to total assets. Despite the higher leverage, Apple's strong ROE and asset management highlight its effective balance sheet utilization.

Cash Flow

Very Positive

Apple's cash flow statement highlights strong cash generation capabilities. The TTM free cash flow is substantial, although it decreased by 9.47% compared to the previous year. The operating cash flow to net income ratio is 1.13, indicating that Apple's operational activities are generating more cash than the reported net income, a positive sign of cash flow health. Additionally, the free cash flow to net income ratio is 1.01, underscoring efficient cash conversion from earnings. Despite the slight decline in free cash flow, Apple's cash flow management remains robust.

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	123.14B	81.02B
	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
107.16B	65.17B	61.55B	48.30B	62.64B	90.94B
	Total Assets
340.62B	364.98B	352.58B	352.75B	351.00B	323.89B
	Total Debt
108.29B	119.06B	111.09B	132.48B	136.52B	122.28B
	Net Debt
68.52B	89.12B	81.12B	108.83B	101.58B	84.26B
	Total Liabilities
251.09B	308.03B	290.44B	302.08B	287.91B	258.55B
	Stockholders Equity
89.53B	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 Price203.92

Price Trends

50DMA

203.51

Positive

100DMA

217.04

Negative

200DMA

224.63

Negative

Market Momentum

MACD

-1.04

Negative

RSI

50.50

Neutral

STOCH

68.27

Neutral

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 203.92 is below the 20-day moving average (MA) of 204.26, above the 50-day MA of 203.51, and below the 200-day MA of 224.63, indicating a neutral trend. The MACD of -1.04 indicates Negative momentum. The RSI at 50.50 is Neutral, neither overbought nor oversold. The STOCH value of 68.27 is Neutral, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOGL	84 Outperform	$2.11T	19.37	34.79%	0.46%	13.02%	37.73%
MSFT	84 Outperform	$3.50T	36.35	33.61%	0.69%	14.13%	12.10%
SONY	79 Outperform	$162.06B	21.54	14.32%	0.36%	1.77%	18.85%
AAPL	76 Outperform	$3.05T	31.82	138.02%	0.49%	4.91%	-0.36%
DELL	72 Outperform	$77.75B	18.15	-179.12%	1.64%	7.67%	―
IBM	68 Neutral	$249.89B	46.25	21.91%	2.49%	1.23%	-33.87%
HPQ	64 Neutral	$23.65B	9.70	84.33%	4.49%	2.08%	-12.41%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%

* Technology Sector Average

Performance Comparison

AAPL

Apple

203.92

11.70

6.09%

GOOGL

Alphabet Class A

173.68

-0.70

-0.40%

HPQ

25.18

-9.78

-27.97%

IBM

International Business Machines

268.87

103.50

62.59%

MSFT

Microsoft

470.38

45.77

10.78%

SONY

Sony Group

26.66

9.59

56.18%

DELL

Dell Technologies

113.75

-16.41

-12.61%

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.

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.