Key Points
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Apple’s value soared 13X to $4.6 trillion under Tim Cook.
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The math doesn’t add up for Apple to have the same growth curve under Ternus, but there are a few ways the new CEO is already making his mark.
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When Tim Cook took the helm at Apple (NASDAQ: AAPL), many people questioned whether the longtime Apple executive could bring the company as much success as the late Steve Jobs had.
Cook was a much different CEO than Jobs was, but it’s safe to say that he far outpaced anyone’s expectations. Under Cook, Apple rose from a $347 billion tech giant to a $4.6 trillion behemoth when he retired — making Apple one of the most valuable companies in the world.
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Apple’s new CEO, John Ternus, faces some of the same initial skepticism as his predecessor, with many wondering whether he can deliver the same value Cook did. And while Ternus could prove to be a great CEO, it’s highly unlikely he’ll replicate the last decade and a half of Apple’s success. Here’s why.
Image source: Apple.
The math just doesn’t add up
Going from a $347 billion company to $4.6 trillion is more than a 13X increase in the company’s valuation. For Ternus’ tenure to match that, it would mean Apple would eventually be worth around $60 trillion. That would put Apple’s valuation 88% higher than the annual GDP of the U.S.
The math for that level of growth doesn’t add up.
What’s more, Apple is facing some pretty significant headwinds that Ternus is dealing with right out of the gate. First, memory prices have risen quickly as tech companies buy up all the available memory for data centers. Even Apple, which can secure large amounts of supply at reduced prices, is grappling with this problem, and it’s eating into its coveted high margins.
Apple’s management said on the company’s Q4 2026earnings callthat margin pressure will continue on its products because of the memory shortage and expects its product margins to be 45% to 46% in the December quarter, which would mark three straight quarters of decline.
One of the leading memory chip companies, SK Hynix, has already sold out half of its memory supply for both 2027 and 2028 and says the supply and demand imbalance will continue through 2030. That may mean we haven’t seen the last of Apple’s margin declines.
Even more consequential for Apple’s market value over the long term is that the company is still trying to figure out its place in the artificial intelligence era.
To keep pace, Apple recently launched Siri AI, which is a far more capable chatbot than before, and can answer questions and perform on-device tasks for Apple users. Apple recently opened Siri AI to developers as well, which will make it even more capable.
Still, Apple could be left behind in the AI race as OpenAI, Anthropic, and Alphabet continue to release highly capable AI models that can do far more than Siri. Apple is also facing increasing competition from Meta, whose popular Muse agent is far better at accomplishing tasks than Siri.
Ternus could still bring a lot of value to Apple
I’m not counting Apple out of the current AI boom, though. Its conservative approach to spending, compared with its peers, is paying off. The company’s non-GAAP earnings per share rose 14% to $2.10 per share in the fourth quarter, and sales rose 12% to $114.5 billion. And the company hasn’t amassed the huge amounts of debt its peers have.
Ternus also appears to be accelerating the timeline of the company’s product launches. In the two short months since taking over, Apple has launched the iPhone Duo, a touchscreen MacBook Pro, and the Apple HomeView smart home device.
Like Cook, Ternus will be judged on how much value he brings to the company. But like his predecessor, he doesn’t need to succeed in the same way as previous leadership — and he should be given plenty of time to prove himself.
Just don’t expect him to turn Apple into a nearly $60 trillion company.
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Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.
