With a market cap of $4.1 trillion, Apple (AAPL 1.50%) is always in the spotlight. This means that investors will constantly scrutinize how it's performing. The two key headwinds this year have been the impact of tariffs and the company's slow roll-out of compelling artificial intelligence features.
Neither of these two factors is my mind right now. As we head into 2026, here's one reason I'm watching this "Magnificent Seven" stock closely.
Image source: Getty Images.
Apple's iPhone sales are strong
During the fourth quarter of fiscal 2025 (ended Sept. 27), Apple reported 6.1% year-over-year revenue growth for its iPhones. And management forecasted an even better double-digit percentage gain for Q1 2026, which includes the critical holiday shopping season. The recently launched iPhone 17 models are seeing robust demand.
This is a very encouraging sign. In fiscal 2025, 50% of Apple's overall revenue came from its iPhone lineup. This product still has a pronounced impact on the company's success. That's not changing anytime soon. Investors should pay close attention to how iPhone sales trend as the calendar turns to 2026.
NASDAQ: AAPL
Key Data Points
The valuation is still rich
Apple is one of the world's most outstanding companies. You'd struggle to find investors that will argue with this statement.
However, the valuation doesn't look cheap. The stock trades at a price-to-earnings ratio of 37.2.
