It can be argued that Apple (AAPL 2.06%) has not been a highly innovative company for years. It has largely relied on modest changes to its popular iPhones, while often lagging behind other tech giants when it comes to notable innovation. Now, in the midst of companies rolling out advanced artificial intelligence (AI) features, it has also come under fire for being too slow and cautious in its approach to AI.
But with the company planning to roll out an enhanced Siri assistant and new AI capabilities in the near future, there's hope that 2026 could be a much stronger year for the stock. Could it be a good addition to your portfolio?
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Demand for iPhones was robust this past quarter
Apple reported its most recent earnings results last week (which covered the last three months of 2025), and they were surprisingly strong. Demand for its iPhones was particularly impressive, which helped the company generate 16% revenue growth for the quarter, as it easily beat expectations for both top and bottom lines.
CEO Tim Cook said: "The demand for iPhone was just simply staggering." The tech company experienced stronger-than-expected demand in China, and it now has 2.5 billion active devices, compared to 2.35 billion a year ago. Users have been holding on to phones longer than they have in the past, and an upgrade cycle may have been overdue. At the same time, users may also be looking to upgrade in anticipation of new AI features to come in the near future. Apple recently announced that it would be working with Alphabet and using its Gemini AI models to help enhance its Siri assistant.
NASDAQ: AAPL
Key Data Points
The stock still has a lot to prove
While the encouraging earnings performance did give Apple's stock a bit of a boost, it's still down around 3% for the year (as of Feb. 2). It does have an excellent user base that it can count on for recurring revenue growth in its vast ecosystem, but whether it's a top growth stock is debatable at this stage. The revenue growth it generated last quarter was by no means typical for the business. In its most recent fiscal year, which ended on Sept. 27, 2025, Apple's top line rose by just 6%, to $416 billion.
Given that the stock trades at 33 times its trailing earnings, Apple's business should be generating double-digit growth on a more consistent basis. Until the business can demonstrate that, I'd pass on the stock, despite the impressive results from last quarter. The business may be doing well, but the stock's price is a bit too high, and it could come under pressure if economic conditions prove to be a concern this year. There are simply better growth stocks out there to consider than Apple.
