Apple(US:AAPL) ZACKS·2026-02-12 18:20Core Insights - Apple shares have appreciated 18.1% over the past six months, outperforming the Zacks Computer and Technology sector's return of 10.2, driven by strong iPhone 17 sales and growth in Services [1][8] iPhone Sales Performance - iPhone 17 sales increased by 23.3% year over year to $85.27 billion, accounting for 59.3% of first-quarter fiscal 2026 net sales [1][8] - The strong sales of iPhone 17 significantly boosted revenues in China during the first quarter of fiscal 2026 [1] Services Growth - Services contributed 20.9% to quarterly revenues, growing 14% year over year to $30.01 billion, aligning with management guidance [1] - The Services segment includes advertising, AppleCare, Cloud Services, and digital content, achieving all-time revenue records in the first quarter of fiscal 2026 [6] AI Initiatives and Collaborations - Apple is enhancing iPhone features through Apple Intelligence tools and a collaboration with Alphabet, which is expected to improve the capabilities of Apple Intelligence [2][3] - The partnership with Alphabet aims to address execution challenges and enhance the adoption of Apple Intelligence among developers [5] Market Position and Valuation - Apple shares have outperformed Microsoft and Amazon but underperformed Alphabet in the past six months, with Alphabet shares rising by 53.9% [11] - Apple's stock is trading at a premium, with a forward price/sales ratio of 8.56, compared to the sector's 6.51 and Microsoft's 8.43 [14] Fiscal Estimates - The Zacks Consensus Estimate for Apple's fiscal 2026 earnings has increased by 3.2% to $8.41 per share, indicating a 12.7% growth from fiscal 2025 [9] - The revenue estimate for fiscal 2026 is pegged at $461.12 billion, reflecting a 10.8% growth over fiscal 2025 [10] Conclusion - Apple's strong iPhone and Services business, along with the expanding AI capabilities from the collaboration with Alphabet, are expected to drive future growth, justifying a premium valuation despite competitive pressures [17]