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Is Apple Stock a Buy Now Ahead of its Product Launch Event?
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Key Takeaways
Apple's launch may bring the iPhone Ultra, A20 Pro-powered iPhone 18 Pro models and Siri AI.
iPhone sales jumped 22% to $54.3B in fiscal Q3, while Apple's total revenues rose 16% to $109.4B.
Supply constraints, rising memory prices and a 33.6x earnings multiple raise near-term risks for AAPL.
Apple (AAPL - Free Report) has its product launch event, “Surprise and Shine," on Wednesday. This launch will be special as it's the first under CEO John Ternus, who took over from Tim Cook on Sept. 1 after Cook's nearly 15-year run.
Apple is expected to unveil the iPhone 18 Pro and Pro Max, powered by a new A20 Pro chip built on a 2-nanometer process. Design-wise, these models won't stray far from last year's iPhone 17 Pro, though the Pro Max may get a size and weight bump for a larger battery, per MacRumors. New Apple Watch Series 12 and Ultra 4 models are also expected.
The real talking point is Apple's first foldable phone, rumored to be called the iPhone Ultra. It will fold like a book— about 5.5 inches closed and 7.6 inches open. This would be Apple's biggest design change in years, and it would put the company up against Samsung and Google, who already sell foldable phones. One can expect a high price tag for the foldable phone.
Year to date, shares of Apple have risen 18%, outperforming close peers like Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
YTD Price Performance Comparison
Image Source: Zacks Investment Research
With shares having a good run and the launch just ahead, investors may be wondering if now's the time to buy. Let's dig deeper.
AAPL's Business Looks Healthy, But Challenges Loom
In the June quarter, iPhone revenues jumped 22% year over year to $54.3 billion, and total revenues rose 16% to $109.4 billion. Management guided 9% to 11% growth for the September quarter, with iPhone revenue growth in the mid-teens. So, demand isn't the problem.
The real issue is supply and cost. Apple has warned that supply chain constraints are expected to hit iPhone, Mac and iPad availability. The main bottleneck is limited capacity for its most advanced chips, and memory prices are expected to keep climbing. June-quarter gross margin came in at 50.1%, aided by tariff refunds, but management expects that to compress to 47%-48% in the fiscal fourth quarter.
Growth Story Intact, But Stock is Pricey
Apple's long-term story still looks strong— more devices, more AI features, a growing services business, and steady cash returned to shareholders. All these support growth over time.
The Zacks Consensus Estimate for AAPL’s fiscal 2026 and 2027 EPS implies year-over-year growth of 18% and 8%, respectively.
Image Source: Zacks Investment Research
But the stock isn't cheap. Apple trades at about 33.6 times earnings. Compare that to Alphabet at 20.4 times and Microsoft at 24.7 times. Apple is priced much higher than its rivals.
AAPL's P/E F12M Vs. MSFT & GOOGL
Image Source: Zacks Investment Research
Our Take
Apple has real reasons for excitement— its first foldable phone, a smarter Siri, and a new CEO trying to make his mark. But the stock is already expensive at current levels, leaving little room for mistakes. Add rising costs and supply shortages, and the risk feels higher than the reward right now. It's smarter to wait and see how the launch plays out before jumping in.
View the Zacks #1 Rank List
Image: Bigstock
Is Apple Stock a Buy Now Ahead of its Product Launch Event?
Key Takeaways
Apple (AAPL - Free Report) has its product launch event, “Surprise and Shine," on Wednesday. This launch will be special as it's the first under CEO John Ternus, who took over from Tim Cook on Sept. 1 after Cook's nearly 15-year run.
Apple is expected to unveil the iPhone 18 Pro and Pro Max, powered by a new A20 Pro chip built on a 2-nanometer process. Design-wise, these models won't stray far from last year's iPhone 17 Pro, though the Pro Max may get a size and weight bump for a larger battery, per MacRumors. New Apple Watch Series 12 and Ultra 4 models are also expected.
The real talking point is Apple's first foldable phone, rumored to be called the iPhone Ultra. It will fold like a book— about 5.5 inches closed and 7.6 inches open. This would be Apple's biggest design change in years, and it would put the company up against Samsung and Google, who already sell foldable phones. One can expect a high price tag for the foldable phone.
Year to date, shares of Apple have risen 18%, outperforming close peers like Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
YTD Price Performance Comparison
With shares having a good run and the launch just ahead, investors may be wondering if now's the time to buy. Let's dig deeper.
AAPL's Business Looks Healthy, But Challenges Loom
In the June quarter, iPhone revenues jumped 22% year over year to $54.3 billion, and total revenues rose 16% to $109.4 billion. Management guided 9% to 11% growth for the September quarter, with iPhone revenue growth in the mid-teens. So, demand isn't the problem.
The real issue is supply and cost. Apple has warned that supply chain constraints are expected to hit iPhone, Mac and iPad availability. The main bottleneck is limited capacity for its most advanced chips, and memory prices are expected to keep climbing. June-quarter gross margin came in at 50.1%, aided by tariff refunds, but management expects that to compress to 47%-48% in the fiscal fourth quarter.
Growth Story Intact, But Stock is Pricey
Apple's long-term story still looks strong— more devices, more AI features, a growing services business, and steady cash returned to shareholders. All these support growth over time.
The Zacks Consensus Estimate for AAPL’s fiscal 2026 and 2027 EPS implies year-over-year growth of 18% and 8%, respectively.
But the stock isn't cheap. Apple trades at about 33.6 times earnings. Compare that to Alphabet at 20.4 times and Microsoft at 24.7 times. Apple is priced much higher than its rivals.
AAPL's P/E F12M Vs. MSFT & GOOGL
Our Take
Apple has real reasons for excitement— its first foldable phone, a smarter Siri, and a new CEO trying to make his mark. But the stock is already expensive at current levels, leaving little room for mistakes. Add rising costs and supply shortages, and the risk feels higher than the reward right now. It's smarter to wait and see how the launch plays out before jumping in.
Apple is still a good company to hold for the long run but right now, it's not a “Buy.” The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.