With a market cap of $3.6 trillion and a standing as the world's most valuable company for a long time (though not anymore), Apple (AAPL +1.18%) seems to always have the spotlight shining brightly on it. It's a powerful consumer brand with global reach. And it is one of the most innovative businesses around.
Shares haven't done well this year, as they are down 5% (as of Sept. 16), which lags the overall market. However, Apple is still getting attention these days.
Here's why everyone is talking about this "Magnificent Seven" stock.
Image source: Getty Images.
Apple's updates continue
On Sept. 9, Apple held an event to reveal fresh updates to some of its products. The most anticipated of these was the iPhone Air, a slim version of the smartphone that the business calls the "thinnest iPhone ever." iPhone 17, 17 Pro, and 17 Pro Max were also announced, with key features being better battery life, cameras, and displays. Customers also received news of AirPods Pro 3, which can do live translation, as well as two new Apple Watch models.
Anytime Apple holds an event like this, there is typically a lot of buzz leading up to it. However, based on the stock's immediate reaction, with it being down a few percentage points in the days following the event, the market didn't appear to be that enthusiastic about what they heard.
Some of the most notable features Apple introduced are already offered by other companies. Slimmer phones have hit the market before. Alphabet started selling earbuds called Pixel Buds that provided live translation in 40 languages as far back as 2017. The Apple AirPods 3 will work with five languages to start, with four more by year end.
No one will deny that Apple is one of the most successful businesses ever. Its strategy rests on not being the first to introduce something, but by taking its time, focusing on the user experience, and aiming to be the best. The trend hasn't changed, and it has worked out well in the past.
NASDAQ: AAPL
Key Data Points
Should you buy Apple stock?
Whenever Apple introduces new products or services, investors should think about how this could affect the company's financial performance. Ideally, the best outcome is that consumers flock to buy these devices, pushing up revenue and earnings in a meaningful way. It would be even better if they led to a surge in services revenue, which is recurring in nature and sports a much higher gross margin.
I'd agree that the iPhone Air is a noteworthy product launch, as it's not every year that the company introduces a totally new form factor. This could draw excitement from consumers, potentially leading to a boost in iPhone sales in the coming quarters. It wouldn't be a surprise to see the iPhone Air registering strong demand.
However, this doesn't mean the stock is a smart buy right now. It's hard to expand meaningfully with over $400 billion in trailing-12-month sales. Wall Street expects slower growth in the years ahead. After revenue rises 6.2% in fiscal 2025, it's expected to increase by 5.2% and 6% over the following two fiscal years, respectively.
Apple's installed base of products, above 2.3 billion (as of Q1 2025) and hitting new records with each passing quarter, is already a gargantuan sum. In particular, the iPhone seems to be ubiquitous. And product refreshes usually come with marginal improvements that don't force consumers to believe that they constantly need to upgrade to the newest iterations, even with a new design. In the latest fiscal quarter, 47% of Apple's entire revenue base came from the iPhone, so the company's success still depends on it.
That muted revenue outlook isn't discouraging on its own. But with the stock trading at a steep price-to-earnings ratio of 36.2, investors might be hoping for better growth potential in order to justify adding Apple to their portfolios today.
