Apple (AAPL 0.85%) has been a laggard in tech lately. Not only is it trailing the other large tech stocks, it's trailing the market's gains, roughly flat year to date.
But don't give up on Apple so fast. It's had several moments over the past few decades where it lagged for years before booming again. And there are good reasons to be confident it can make another comeback. Here's one of them.
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The user favorite
Apple's most popular product is the iPhone, and it accounts for around half of Apple's total sales. Customers consistently upgrade when there are new launches, and even people who hold on for years eventually need to get a new phone for one reason or another.
NASDAQ: AAPL
Key Data Points
Nearly all U.S. adults own a smartphone today -- 91% according to Pew research. Apple accounts for more than half of U.S. smartphones, which is a massive moat that's not easily overcome, no matter how much technology today is changing. If it is changing, Apple is usually leading.
Recently, users and investors alike have been disappointed in how Apple's artificial intelligence (AI) initiative, Apple Intelligence, is coming along, or more accurately not coming along. But over the next five years, it's likely to have its own breakthrough, and coupled with the iPhone's advantages of quality and ease of use, it should keep customers close to the brand. iPhone sales increased 13% year over year in the 2025 fiscal third quarter (ended June 28), demonstrating that despite its size and market share, the iPhone can still generate high sales. As the AI race speeds up, look for Apple Intelligence to boost iPhone sales further and for Apple to make a healthy comeback.
