Apple: The Mag 7's Dead Money Stock or AI Cash Cow in the Making?

Core Viewpoint - Apple has faced significant challenges in 2025, being the worst-performing stock among the Magnificent Seven, with a total return of approximately -20% [1][2] Group 1: Financial Performance - Apple's product revenue for the last 12 months stands at $298 billion, nearly unchanged from $297 billion in fiscal 2021 [3] - The company's services revenue has reached $102 billion, reflecting a 50% increase from fiscal 2021, with a gross margin of approximately 75% [4] - Overall, Apple's total revenues have increased by around 9% compared to fiscal 2021, while adjusted earnings per share (EPS) have risen by about 20% due to a 9% reduction in outstanding shares, with over $300 billion spent on buybacks [5][6] Group 2: Growth Challenges and Opportunities - Apple needs to re-accelerate its revenue growth, particularly in product sales, as current offerings do not significantly differentiate from older models [7][8] - The company is reportedly planning to invest $500 billion over the next four years to enhance its AI capabilities, which could open new avenues for growth [10] - Despite falling behind in the AI race, Apple's large customer base provides it with time to catch up, and advancements in AI could lead to significant new opportunities [11][12] Group 3: Market Outlook - The 12-month stock price forecast for Apple is $234.39, indicating a potential upside of 16.57% based on 33 analyst ratings [8] - While Apple holds a Moderate Buy rating, it is not currently favored by top analysts compared to other stocks [13]