As stories directly related to the AI ecosystem have been in the limelight, Apple (AAPL) stock has been relatively subdued. In the last 52 weeks, AAPL stock has returned 9%.
However, backed by innovation, Apple continues to create growth opportunities. A good example is the recent news that Apple is working on an AI chatbot. This is likely to be integrated into iPhone, iPad, and Mac. The chatbot, under the code name of Campos, is likely to feature the conversational style of OpenAI's ChatGPT and Google’s (GOOG) (GOOGL) Gemini.
Similarly, Apple is working on a wearable pin that’s likely to be released in 2027. This device is expected to offer multiple cameras, a speaker, microphones, and wireless charging. Therefore, with a focus on adding value to existing products and delivering innovative new products, Apple looks interesting.
About Apple Stock
Headquartered in Cupertino, Apple is one of the leading names globally in personal technology. The company’s broad portfolio of products includes iPhone, iPad, Mac, AirPods, Apple Watch, and Apple Vision Pro. Further, Apple has six software platforms that include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS.
Backed by innovation, sustained growth, and robust cash flows, Apple commands a market valuation of $3.64 trillion. For FY 2025, Apple reported revenue of $416 billion, with iPhone and services being the key revenue drivers.
With steady growth, AAPL stock has been in a moderate uptrend. In the last six months, the stock has trended higher by 14%.
Strong Fundamentals and Attractive Product Pipeline
Apple commands high financial flexibility that allows for investment in innovation. As of FY25, the company reported cash (including marketable securities) of $132.4 billion. Further, for the last financial year, operating cash flows were $111.5 billion. Clearly, there is ample headroom for investments and shareholder value creation.
It’s therefore not surprising that Apple has an attractive product pipeline. This is likely to ensure that top-line growth remains healthy. This year, Apple will be launching the foldable iPhone at a price of $2,000. A Citi analyst expects shipment of eight million units of this phone in 2026. Further, in 2027, the shipments are likely to be ramped up to 20 million units.
At the same time, iPhone 18 Pro/Pro Max models are due for launch. It’s worth noting that for Q4 2025, Apple was leading China’s smartphone market with a 22% share. This was driven by strong traction for iPhone 17. With the impending launches, it’s likely that Apple will continue to dominate.
What Analysts Say About AAPL Stock
Based on the ratings of 42 analysts, AAPL stock is a consensus “Moderate Buy.” While 21 analysts assign a “Strong Buy” rating to AAPL, three and 16 analysts have assigned a “Moderate Buy” and “Hold” rating, respectively. On the bearish side, one analyst each has a “Moderate Sell” and “Strong Sell” rating, respectively.
Based on these ratings, analysts have a mean price target of $289.21 currently, which would imply an upside potential of 18%. Further, considering the most bullish price target of $350, the upside potential for AAPL stock is 42%.
From a valuation perspective, a forward price-earnings ratio of 30.4 seems attractive considering the fundamentals and cash flow potential. Recently, Goldman Sachs opined that the weakness in AAPL stock is a “buying opportunity” with a price target of $320. This view is supported by the prospects of steady top-line growth coupled with potential gross margin expansion as services revenue increases.
Similarly, Evercore has an “Outperform” rating for AAPL stock with a price target of $330. Evercore believes that the upcoming earnings are likely to be a catalyst for stock upside, with healthy growth likely in iPhone and services revenue.
On the date of publication, Faisal Humayun Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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