# Apple (AAPL)

Sector: Consumer electronics & services

| Field | Value |
|---|---|
| Price | $350.69 |
| Market cap | $5.1T |
| Intrinsic value source | Analysts |
| Data as of | 2026-11-10 |
| Next earnings | 2027-02-02 (estimate) |

Analysts: Leaning bullish

Picks: Research only

Discount category: Far above intrinsic value

## In short

Investors pay a premium for Apple's steady cash flow and Services growth, and the premium holds only if margins stay firm as memory costs rise and courts leave its Services profit intact.

## Themes and gap

- Themes: Regulation and courts (regulation-legal), Tariffs and trade (trade-tariffs), China and geopolitics (china-geopolitics)
- Gap type: Can close (closable)
- Why: The premium depends on steady margins and Services profit: the Q1 fiscal 2027 report, expected in early February 2027, shows the margin as memory costs rise, and the Epic decision is due by June 2027.

## About

Apple designs and sells iPhone, Mac, iPad, Apple Watch, AirPods and home products, and it sells services. Services include the App Store, iCloud, Apple Music, Apple TV, Apple Pay, AppleCare, advertising and licensing fees, such as payments from Google for search on Apple devices. Outside companies make most of its products. In fiscal 2026, which ended on September 26, 2026, revenue was a record $478.8 billion. iPhone gave $254.1 billion and Services gave $123.3 billion. Greater China gave $82.4 billion. More than 2.5 billion active devices use Apple's software. John Ternus became CEO on September 1, 2026, and Tim Cook became executive chairman.

## Thesis

Apple trades at a premium because investors pay for a safe, high-quality company with very large and steady cash flow. It has more than 2.5 billion active devices, its Services revenue grows each year with a gross margin of 76.2% in fiscal 2026, and it returns most of its cash through buybacks and dividends. Investors also pay for a new upgrade cycle with the iPhone 18, the iPhone Duo and the new Siri AI. Three risks can make the premium smaller. First, memory and storage costs rise fast. Apple said in its 10-K that these cost trends will become stronger, and press reports of the November 2, 2026 call say that it guided the December quarter gross margin to 45% to 46%, after 47.9% in the September quarter. Tariff refunds also added to the fiscal 2026 margin, and they will not repeat. Second, part of the Services profit depends on courts and rules that Apple does not control: the Google search payments, the App Store rules in the Epic case and the EU Digital Markets Act. Third, Apple uses Google's Gemini models for its new Siri AI, so it does not lead in AI models. For the premium to be earned, three things must be true. Gross margin must stay at 45% or more while memory prices rise. Services revenue must keep growing about 8% or more a year. The iPhone 18 and iPhone Duo cycle with Siri AI must keep iPhone revenue near the record of fiscal 2026. The Q1 fiscal 2027 report, expected in early February 2027, is the next test. The Supreme Court decision in the Epic contempt case, expected by June 2027, tests the App Store rules. A lower margin or a court loss that cuts Services profit can remove part of the premium over the next four to six quarters.

## Checkpoints

- Feb 2, 2027 (estimate): Q1 fiscal 2027 results: margin and iPhone cycle. Status: Pending. Watch: Revenue growth of 7% to 10% with a gross margin of 45% or more passes; a gross margin below 45% or lower iPhone revenue than a year earlier fails.
- Jun 2027 (estimate): Supreme Court decision in the Epic contempt case. Status: Pending. Watch: A decision that narrows the contempt finding and lets Apple charge a fee on outside purchases passes; a decision that keeps the ban on all such fees fails.

## Balance sheet

- Cash: $136.9B
- Debt: $80.7B
- Net cash: $56.2B
- EBITDA, last 12 months: $171.5B
- Debt due within 12 months: $12.0B
- Ratings: Moody's Aaa (stable outlook), S&P AA+ (stable outlook)

Apple holds more cash and marketable securities than debt. At September 26, 2026, cash, cash equivalents and marketable securities were $136.9 billion. Fixed rate notes had a principal of $78.7 billion, with $10.0 billion due within 12 months, and commercial paper was $2.0 billion. So net cash was about $56.2 billion (a calculation from the 10-K figures). In fiscal 2026, Apple repaid $12.4 billion of term debt and $5.9 billion of commercial paper, and it issued no new term debt. Operating cash flow was $145.1 billion and capital spending was $9.0 billion. Apple bought back $85.8 billion of its stock and paid $15.7 billion of dividends. EBITDA is operating income plus depreciation and amortization for fiscal 2026. On November 5, 2026, after the balance sheet date, Apple sold $7.5 billion of new notes due 2028 to 2036. Apple also had manufacturing purchase obligations of $89.7 billion, of which $82.7 billion is due within 12 months.

As of 2026-09-26.

Sources:

- https://www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm
- https://www.sec.gov/Archives/edgar/data/320193/000032019326000024/a8-kex991q4202609262026.htm
- https://www.sec.gov/Archives/edgar/data/320193/000114036126042173/ny20084621x3_fwp.htm

## Dividends

- Dividend yield: 0.3% (last 12 months, at the current price)
- Paid per share, last 12 months: $1.06 (4 payments)
- Current annual rate: $1.08 ($0.27 x 4 a year)
- Payout ratio: 12% of the earnings of the last fiscal year (the year ended 2026-09-26)
- Latest ex-dividend date: 2026-08-10, $0.27 per share
- Growth over the last 5 years: 4.1% a year
- Growth over the last 10 years: 6.6% a year

Dividends per share by year: 2016: $0.5575, 2017: $0.615, 2018: $0.705, 2019: $0.76, 2020: $0.8075, 2021: $0.865, 2022: $0.91, 2023: $0.95, 2024: $0.99, 2025: $1.03.

Source: company filings and market data, read on 2026-11-09.

## Recent events

- 2026-11-05: Apple sold $7.5 billion of new notes in seven parts: floating rate notes due 2028 and 2029, and fixed rate notes due 2028, 2029, 2031, 2033 and 2036. The notes settled on November 9, 2026. Moody's rates them Aaa and S&P rates them AA+, both with a stable outlook.
- 2026-11-03: Apple filed its fiscal 2026 10-K. It said that supply limits and rising costs for memory and storage will become stronger. It applied for refunds of the tariffs that the Supreme Court struck down on February 20, 2026, and it records the refunds as lower cost of sales.
- 2026-11-02: Apple reported Q4 fiscal 2026 results. Revenue was a September quarter record of $114.5 billion, up 12%. Gross margin was 47.9%, including about 1 percentage point from tariff refunds. Diluted EPS was $2.10, up 14%, including $0.05 from tariff refunds. Fiscal 2026 revenue rose 15% to $478.8 billion, with iPhone up 21% and Services up 13%. Apple returned $28 billion to shareholders in the quarter. Press reports of the call say that Apple expects December quarter revenue growth of 7% to 10% and a gross margin of 45% to 46%, because memory costs rise.
- 2026-09-01: John Ternus became CEO and joined the board. Tim Cook became executive chairman, and Arthur Levinson became lead independent director.
- 2026-07-30: Apple reported Q3 fiscal 2026 results. Revenue was $109.4 billion, up 16%. Gross margin was 50.1%, including about 2 percentage points from tariff refunds. Diluted EPS was $2.02, up 29%, including $0.11 from tariff refunds. Apple introduced the new Siri AI at WWDC26 in June.
- 2026-06-30: The Supreme Court agreed to review the legal standard for civil contempt in the Epic Games case, in which a lower court bans Apple from charging fees on purchases that users make outside an app.
- 2026-04-30: Apple reported Q2 fiscal 2026 results. Revenue was a March quarter record of $111.2 billion, up 17%, and diluted EPS was $2.01, up 22%. The board raised the quarterly dividend 4% to $0.27 and authorized a new buyback program of up to $100 billion.
- 2026-04-20: Apple announced that John Ternus, its head of hardware engineering, will become CEO on September 1, 2026, and that Tim Cook will become executive chairman.
- 2026-02-20: The Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act. Apple then applied for refunds of the tariffs it paid.
- 2026-01-29: Apple reported Q1 fiscal 2026 results. Revenue was an all-time record of $143.8 billion, up 16%, and diluted EPS was $2.84, up 19%. Apple said that more than 2.5 billion active devices use its software.
- 2026-01-12: Apple and Google said in a joint statement that Google's Gemini models and cloud technology will be the base of the next Apple Foundation Models, which power the new Siri. They did not give the financial terms.
- 2025-12-11: The Ninth Circuit Court upheld most of the 2025 injunction in the Epic Games case. It allowed Apple to charge some commission on purchases through outside links and sent the case back to the district court.

## Latest news and filings

- Last earnings: 2026-11-02 (8-K: https://www.sec.gov/Archives/edgar/data/320193/000032019326000024/)
- Next earnings: 2027-02-02 (expected; the company has not confirmed it)

| Filed | Form | Headline | Period end | XBRL document | Link |
| --- | --- | --- | --- | --- | --- |
| 2026-11-03 | 10-K | Annual report for the period ended Sep 26, 2026 | 2026-09-26 | aapl-20260926 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000026/aapl-20260926.htm |
| 2026-11-02 | 8-K | Earnings release |  | aapl-20261102 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000024/aapl-20261102.htm |
| 2026-07-31 | 10-Q | Quarterly report for the period ended Jun 27, 2026 | 2026-06-27 | aapl-20260627 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000020/aapl-20260627.htm |
| 2026-07-30 | 8-K | Earnings release |  | aapl-20260730 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000018/aapl-20260730.htm |
| 2026-05-01 | 10-Q | Quarterly report for the period ended Mar 28, 2026 | 2026-03-28 | aapl-20260328 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000013/aapl-20260328.htm |
| 2026-04-30 | 8-K | Earnings release |  | aapl-20260430 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000011/aapl-20260430.htm |
| 2026-04-20 | 8-K | Change of directors or officers |  |  | https://www.sec.gov/Archives/edgar/data/320193/000114036126015711/ef20071035_8k.htm |
| 2026-02-24 | 8-K | Shareholder vote results |  |  | https://www.sec.gov/Archives/edgar/data/320193/000114036126006577/ef20060722_8k.htm |
| 2026-01-30 | 10-Q | Quarterly report for the period ended Dec 27, 2025 | 2025-12-27 | aapl-20251227 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000006/aapl-20251227.htm |
| 2026-01-29 | 8-K | Earnings release |  | aapl-20260129 | https://www.sec.gov/Archives/edgar/data/320193/000032019326000005/aapl-20260129.htm |

Every filing on SEC EDGAR (CIK 320193): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000320193&type=&dateb=&owner=include&count=40

## Risks

- High: Memory and storage costs rise fast, and Apple expects these trends to become stronger. Gross margin fell to 47.9% in the September 2026 quarter, and press reports say that Apple guided 45% to 46% for the December quarter. Price increases can lower demand, and tariff refunds that helped fiscal 2026 will not repeat.
- Medium: Part of the Services profit depends on legal results. An appeal in the Google search case can stop or cut Google's payments to Apple. The Epic Games case limits App Store fees on outside purchases. The EU can fine Apple up to 10% of worldwide revenue under the Digital Markets Act.
- Medium: Greater China gave $82.4 billion of revenue in fiscal 2026, and most products are made in Asia. New U.S. tariffs under Section 232 or Section 301, or a conflict between the U.S. and China, can raise costs or lower sales.
- Medium: Apple uses Google's Gemini models for its new Siri AI. If Siri AI does not make users upgrade, or if the partnership changes, Apple can fall behind in AI.
- Low: John Ternus became CEO on September 1, 2026. A new CEO can change product and capital return priorities, although Tim Cook stays as executive chairman.

## Links

- Page: https://picks.utilarium.app/company/AAPL/
- History of changes: https://picks.utilarium.app/company/AAPL/history/
- JSON with full history: https://picks.utilarium.app/data/company/AAPL.json

> Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.