Apple (AAPL 0.38%) stock ended 2025 with a very middling 8% gain, behind the S&P 500's (^GSPC 0.74%) glorious 17% climb. There are a number of reasons why the market hasn't been thrilled with Apple, including delays in Apple Intelligence and a slowdown in growth.
However, things might be looking up for the iPhone maker, and the stock is up 59% since it hit a low in April. Let's see where it could be a year from now.
Image source: Getty Images.
It's all about the iPhone
Apple stock often moves along with iPhone sales, since they account for around half of the total. On the one hand, that's an amazing edge over other smartphone makers; Apple accounts for about half of the U.S. smartphone market, according to Counterpoint Research. That's a clear advantage in the company's most important market. That edge is solidified through Apple's robust ecosystem, with a range of interconnected, high-quality products that customers love and don't switch from.
On the other hand, this works against the company at times, specifically when iPhone sales are sluggish. It's often a cycle, and that's dictated by how frequently customers need to upgrade to the newest technology.
iPhone sales have been healthy recently, with a 6% increase in the 2025 fiscal fourth quarter (ended Sept. 27). Even better, analysts are expecting a strong holiday season. We'll get to see how well it turned out when Apple reports fiscal first-quarter earnings at the end of January.
If it gets started on the right foot, with positive feedback on the latest launch, the iPhone 17, Apple could enjoy continued healthy sales this year from its premier product. In a year from now, it should already be on to the next launch, and how that does may be highly dependent on how Apple Intelligence shapes up over the next year.
Although there has been a positive anecdotal customer response to Apple Intelligence progress, analysts see it lagging the other major AI companies like Amazon and Alphabet. Apple recently signed a deal with Alphabet to use its large language models (LLM) for some products, and that could enable Apple to release more valuable features over the next year or so.
NASDAQ: AAPL
Key Data Points
Or is it?
Apple sits at the intersection of hardware and software, since its business is devices, but they're backed up by intense software design that delivers a level of quality loyal fans expect.
The device business, specifically iPhones, may be Apple's core business, but one of the reasons users are so invested in Apple is that its products all work together to create a smooth, seamless consumer experience. Along with the iPhone 17, Apple launched a host of other new products, including an AirPods upgrade with many AI features and laptops using its new M5 chip that's designed to handle powerful AI functions. These products all work together and keep satisfied users in the system.
Apple has also been succeeding with its robust slate of services, which account for about 28% of revenue and increased 15% in the fourth quarter. They're high-margin businesses that trickle down to the bottom line. Total adjusted earnings per share (EPS) increased 13% year over year in the fourth quarter, and the high-volume devices plus the high-margin services have a yin-yang relationship that keeps the business flowing.
As investors see Apple continuing to roll out new, user-friendly products and sales keep climbing, I envision Apple stock doing better in 2026 than it did in 2025. It could also finally release the Apple Intelligence plan investors have been waiting for.
At its recent price, Apple stock trades at a P/E ratio of 37, which is fairly expensive. However, it deserves some premium for its continued potential. Long term, it's hard to argue that Apple won't be a solid play for investors.
