Personal electronics giant Apple (AAPL -0.16%) has been a household name since unveiling the first iPhone in 2007. Since then, most investors have done well buying and holding Apple stock. It's outperformed the market, turning a $10,000 investment into more than $590,000. Not bad for just over 16 years!

But Apple is the world's largest publicly traded company today, with a market value of $2.4 trillion. That's roughly 10% of the entire U.S. economy. Apple's size means that investors must be more careful in choosing their entry points.

Investors thinking about buying Apple stock in this volatile market should think twice. The stock might not behave like the market-beater most have come to know it as. Here is why.

The 5G hangover

Apple generates revenue from selling a variety of electronics and service subscriptions, but the iPhone remains its golden goose. It contributes between 50% and 60% of Apple's total revenue in a given quarter. You can see below how the company is coming off a two-year growth spurt that saw annual sales jump roughly $100 billion.

The first iPhone to run on 5G networks was unveiled at the end of 2020, and growth soared as people upgraded their phones over the following two years (many phone payment plans span about two years). However, Apple's on the other side of that surge, and lapping that success creates tough comparables. Additionally, Wall Street is openly worried about a potential recession, which could keep consumers from rushing to upgrade a device that costs hundreds of dollars.

AAPL Revenue Growth Estimate for Current Fiscal Year Chart

AAPL Revenue Growth Estimate for Current Fiscal Year data by YCharts

You can see in the chart above that analysts have dramatically reigned in growth expectations for 2023, expecting revenue to come in flat or slightly negative this year. This could trickle down to the bottom line, putting pressure on Apple's massive share repurchases to drive earnings growth.

Expectations could be too high

A common way to value stocks of mature companies like Apple is the price-to-earnings ratio (P/E), which illustrates how much the market is paying for a share of the company's profits. Investors might pay more for a company's earnings for several reasons. Perhaps they believe a company will earn more down the road, or they feel it's dependable and will produce when the economy gets shaky.

Apple could check both boxes -- not only does it have a tremendous success story behind it, but analysts believe its earnings per share (EPS) will grow by an average of 12% annually for the next several years.

AAPL PE Ratio Chart

AAPL PE Ratio data by YCharts

But markets can get carried away, pushing valuations higher or lower than a company's fundamentals can justify. In Apple's case, the stock's valuation has risen since the pandemic. While the P/E isn't as high as in 2021, the current P/E of almost 26 is still more than 30% higher than Apple's average over the past 10 years. The critical question is whether Apple can justify this higher valuation.

Where will Apple be in one year?

With a year of potentially stagnant growth on tap, the stock could have difficulty holding its current valuation. If revenue and earnings don't grow, any increase in the share price would directly impact Apple's valuation. Will the market push the stock even higher past its average valuation if the company isn't growing? It's pretty hard to imagine that happening.

Instead, the stock could trade sideways or decline until the valuation falls more in line with its long-term average. Many stocks have reverted to pre-pandemic valuations, but Apple still hasn't.

Where will Apple be in one year? I can't tell you with certainty, but since trading higher than today's price could be the least likely outcome, the smart move could be staying away from shares until the valuation makes more sense.