Key Points
Apple (NASDAQ: AAPL) has been sneakily delivering a strong 2026. It’s up about 27% this year, easily outperforming the market. It’s doing it without the fanfare of artificial intelligence (AI), although it has made some improvements in that area.
However, after such a great run in 2026, is it still a solid stock to buy now? I think history says it’s not.
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Business performance and stock performance are misaligned
Apple’s business needs little introduction. Almost everyone in the U.S. has interacted with an Apple product at one time or another, and it has a strong grip on the consumer hardware space. However, this isn’t typically considered a high-growth industry. Consumers only have so much money to spend on electronics and other gadgets, and Apple has saturated the market. Whether it’s a phone, laptop, or watch, there’s an Apple product for that. For years, Apple struggled with slow growth, but it has recently broken out above the 10% year-over-year growth mark.
AAPL Revenue (Quarterly YoY Growth) data by YCharts.
That comes after years of single-digit-to-negative growth, and it has the market excited. However, there are questions as to how long this will last. There’s currently a substantial smartphone upgrade cycle underway, and once it wraps up, Apple could have a tough time keeping up with sales.
From a stock perspective, Apple’s growth is underperforming its stock performance, which has pushed Apple to some valuation extremes.
Over the past decade, Apple stock breached 40 times earnings twice.
AAPL PE Ratio data by YCharts.
Each time it did so, the valuation declined by 25% to 30 times earnings or lower. That pattern looks slated to repeat itself in 2027 and could make Apple returns a bit scarce next year unless it can grow its way out of it.
However, with Wall Street analysts projecting 10% revenue growth in 2027, it’s clear it won’t grow substantially faster than the broader market. The S&P 500 (SNPINDEX: ^GSPC) tends to grow at about a 10% pace on average. If Apple’s revenue growth is at the same pace, then having nearly double the price tag doesn’t make a ton of sense (the S&P 500 trades for 23.2 times earnings).
As a result, I think there are far better stocks to buy right now than Apple. The pattern is pretty clear that Apple’s stock doesn’t get much more expensive than this, so there will be far better times to buy in the future.
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Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
