5 Reasons I Still Love Apple Stock, Even After It Soared Higher

Core Viewpoint - Apple's premium valuation is supported by a strong iPhone cycle and increasing high-margin services revenue [1][2] Group 1: Growth and Revenue - Apple's revenue has begun to reaccelerate, with year-over-year growth of 4%, 5%, 0%, and 8% across the four quarters of fiscal 2025, resulting in full-year growth exceeding 6% compared to just 2% in fiscal 2024 [3] - The current iPhone 17 cycle is a significant driver of revenue rebound, with iPhone revenue experiencing double-digit growth year-over-year in Q3 and continuing to rise in Q4 [4][5] - Management has guided for total revenue growth of 10% to 12% year-over-year for the current quarter, indicating sustainable momentum [8] Group 2: Services and Margins - The services segment, which includes the App Store, Apple Music, and AppleCare, grew 15% year-over-year in Q4 of fiscal 2025, representing nearly 30% of total revenue [6] - The shift towards recurring revenue sources in services enhances profitability, with services commanding a gross margin approximately double that of hardware [7] Group 3: Future Catalysts - The potential for artificial intelligence (AI) to drive a new hardware upgrade cycle is a key factor for investor confidence, with Apple increasing capital spending and R&D in AI [9][10] - AI integration across devices is expected to enhance product offerings and create demand for new products, positioning Apple favorably in the market [10] Group 4: Market Valuation - Apple's stock trades at around 32 times forward earnings, reflecting a rich valuation that could be pressured by unexpected setbacks in iPhone demand or services growth [11]