Apple (AAPL +0.05%) hasn't delivered the biggest of wins for investors over the past year. Though the stock advanced about 8% in 2025, it underperformed the S&P 500 and fell far short of the double- and triple-digit gains that many other tech players produced. As tech investors sought out artificial intelligence (AI) stocks, Apple, which hasn't been at the forefront of AI development and use, often didn't make the cut.
But this sluggish stock market performance doesn't reflect the company's recent earnings story. Apple, the maker of the iPhone, Mac, and other leading devices, over time has generated significant growth -- and the company reached major milestones in the recent quarter, reinforcing its position as a longtime industry winner. For example, in the quarter, revenue and earnings per share each hit all-time highs.
Now the question is: Will Apple's explosive growth continue? This often overlooked figure may answer that question.
Image source: Getty Images.
Apple's crown jewel
So, first, let's consider Apple's recent path -- and why it hasn't been a "go to" AI stock for tech investors. As mentioned, Apple has become a market leader when it comes to devices -- and the company's iPhone is the crown jewel, offering Apple a significant moat or competitive advantage. In this case, the moat is Apple's brand strength. Users of the iPhone are loyal to this product and are willing to wait for updates -- and they're ready to pay more for it than they might pay for a rival product.
Last year, the iPhone 16 was the best-selling smartphone worldwide, according to Counterpoint Research, and out of the top 10 best sellers, Apple phones took seven of the spots. Considering Apple first introduced the iPhone back in 2007, the product clearly has proven its ability to stay on top over the long term.
Though Apple has focused on updating its devices and making them more and more appealing to users, the company wasn't the first to rush into the AI space. Instead, Apple took a slower approach to developing AI and rolling out features across its devices -- the company only launched Apple Intelligence in late 2024. And that meant investors looking to bet on the AI boom generally skipped Apple and opted for players that have gone all in on the technology.
A headwind eliminated
Meanwhile, Apple stock also faced another headwind: For a good part of 2025, investors worried the company would face heavy import tariffs since it relies on iPhone manufacturing in China. But news of exemptions for companies such as Apple that are investing in U.S. manufacturing eliminated that risk.
NASDAQ: AAPL
Key Data Points
Now, let's consider the latest earnings report -- and a bit of information that you shouldn't overlook. In the fiscal first quarter, Apple reported a 16% gain in revenue to more than $143 billion, and diluted earnings per share rose 19% to $2.84. Both reached record levels. And the company called iPhone demand "staggering," as the device delivered its best quarter ever.
Though Apple is a well-established market giant, this performance shows it still has what it takes to deliver significant growth. Will the growth continue? It's true that demand for new phones comes in cycles -- after people upgrade, they won't immediately buy new phones a year later. And Apple must continue innovating to prompt users to upgrade as early as possible, rather than sticking with their old phones.
A double-digit increase
Now here's the often overlooked figure that sets the tone for growth, and that's the increase in "switchers," or people who previously used another phone brand and just recently switched to the iPhone. In China, which represents about 18% of Apple's total sales, switchers climbed in the double digits in the quarter.
This ability to increase the user base in a key market suggests that Apple's growth momentum continues. Apple doesn't have to rely uniquely on those aiming to upgrade and is still seeing significant growth in new customers. And today, as some investors rotate out of last year's AI highflyers, they may consider getting in on this tech giant. Especially as it looks very reasonably priced at 30x forward earnings estimates.
All of this shows us that we, as investors, may not always have to turn to younger and smaller companies for growth -- we might also find it with a market heavyweight like Apple.
