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1. Company Snapshot

1.a. Company Description

Apple Inc.designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.


It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts.In addition, the company offers various services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property.The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets.


It distributes third-party applications for its products through the App Store.The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers.Apple Inc.


was incorporated in 1977 and is headquartered in Cupertino, California.

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1.b. Last Insights on AAPL

Apple's recent challenges are attributed to escalating concerns over its international revenue reliance. The company's dependence on foreign markets has raised investor anxiety. Additionally, several institutional investors, including Alley Investment Management Company LLC and Lederer & Associates Investment Counsel CA, have lessened their holdings in the company. Furthermore, Apple's stock faced significant pressure due to a potential market rotation out of big tech names. Analysts' optimism about the iPhone 17 cycle has also been overshadowed by macroeconomic tensions, such as Trump's tariff threats.

1.c. Company Highlights

2. Apple's Q1 FY2026 Earnings: A Record-Breaking Quarter

Apple's Q1 fiscal year 2026 revenue reached an all-time high of $143.8 billion, up 16% year over year, driven by strong iPhone sales, which grew 23% to $85.3 billion. The company's Services revenue also saw significant growth, reaching $30 billion, up 14%. Earnings per share (EPS) came in at $2.84, beating estimates of $2.67, representing a 19% year-over-year increase. Gross margin was 48.2%, and operating expenses were $18.4 billion, up 19%. The company's net income was $42.1 billion, and operating cash flow was $53.9 billion.

Publication Date: Feb -02

📋 Highlights
  • Record Revenue Growth: Q1 revenue surged to $143.8B (+16% YoY), driven by iPhone ($85.3B, +23%) and Services ($30B, +14%)
  • EPS & Net Income Records: Diluted EPS hit $2.84 (+19% YoY), with net income of $42.1B, both all-time highs
  • Services Momentum: Services revenue grew 14% to $30B, outpacing third-party estimates and showing broad category expansion
  • Installed Base Expansion: Active devices exceeded 2.5B, with Mac installed base at record levels and India’s market revenue setting new milestones
  • Shareholder Returns: Returned $32B to shareholders via $25B share buybacks and $3.9B dividends, with $54B net cash on hand

Segment Performance

iPhone revenue set an all-time record in Greater China, driven by customer enthusiasm for the latest iPhone lineup. The Mac installed base reached an all-time high, and iPad revenue was $8.6 billion, up 6%. Wearables, home, and accessories revenue was $11.5 billion, down 2% due to AirPods Pro 3 constraints. The company's services business, including advertising, music, and cloud services, saw broad-based growth.

Growth Prospects and Challenges

For Q2, Apple expects revenue growth of 13-16% year-over-year, with services revenue growing at a similar rate to Q1. However, the company is facing supply chain constraints driven by advanced node capacity, which is expected to impact Q2 production. Memory prices had a minimal impact on Q1 gross margin but are expected to have a greater impact in Q2.

Valuation and Outlook

With a P/E Ratio of 32.49 and an ROE of 159.94%, Apple's valuation suggests that the market is pricing in significant growth expectations. The company's commitment to investing $600 billion in US industries over four years and its partnership with Google on AI and machine learning are expected to drive future growth. Analysts estimate next year's revenue growth at 6.7%. Apple's strong financial performance and growth prospects make it an attractive investment opportunity.

Capital Allocation and Shareholder Returns

Apple returned $32 billion to shareholders, including $3.9 billion in dividends and $25 billion in share repurchases. The company has a strong balance sheet, with $54 billion in net cash and $91 billion in total debt. Apple's capital allocation strategy is focused on returning value to shareholders while investing in growth initiatives.

3. NewsRoom

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Apple might take a new approach to announcing its next products

Feb -22

Source: techcrunch.com

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How Many Markets Does Apple Dominate? The Answer Might Shock You

Feb -22

Source: fool.com

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How Apple's Lazy AI Strategy Could Crush the Competition

Feb -22

Source: 247wallst.com

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Apple's AI Valuation, Zuckerberg's Consultation With Tim Cook And More: This Week In Appleverse

Feb -22

Source: feeds.benzinga.com

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Apple Obliterated Tariff Headwinds - The Supreme Court Decision Doesn't Matter

Feb -22

Source: seekingalpha.com

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Apple Inc. $AAPL is International Assets Investment Management LLC’s Largest Position

Feb -22

Source: defenseworld.net

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Modera Wealth Management LLC Sells 27,751 Shares of Apple Inc. $AAPL

Feb -22

Source: defenseworld.net

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Apple Inc. $AAPL Stake Raised by Global Assets Advisory LLC

Feb -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.59%)

6. Segments

Americas

Expected Growth: 5.2%

Strong demand for iPhones and Macs, driven by consumer preferences for premium products, will fuel growth in North and South America, including the United States, and Latin America.

Europe

Expected Growth: 4.5%

Strong brand loyalty, increasing adoption of streaming services, and growing demand for premium products drive Apple's European segment growth, led by key markets such as the UK, Germany, and Italy.

Greater China

Expected Growth: 12.2%

Growing middle class and increasing adoption of premium smartphones in Taiwan and Hong Kong, and the Chinese government's efforts to promote domestic consumption in China

Rest of Asia Pacific

Expected Growth: 10.5%

Apple’s Asia Pacific segment is expected to grow, driven by increasing demand for premium smartphones and expanding 5G network infrastructure in Australia, New Zealand, and other countries in the region.

Japan

Expected Growth: 4.5%

Growing demand for premium smartphones and increasing adoption of remote work solutions drive Apple’s sales in Japan, driven by the popularity of iPhone and iPad.

7. Detailed Products

iPhone

A line of smartphones designed and marketed by Apple Inc.

Mac

A line of personal computers designed, developed, and marketed by Apple Inc.

iPad

A line of tablet computers designed, developed, and marketed by Apple Inc.

Apple Watch

A line of smartwatches designed, developed, and marketed by Apple Inc.

AirPods

A line of wireless earbuds designed, developed, and marketed by Apple Inc.

Apple TV

A line of digital media players designed, developed, and marketed by Apple Inc.

Apple Music

A music streaming service developed and marketed by Apple Inc.

iCloud

A cloud storage and cloud computing service developed and marketed by Apple Inc.

Apple Pay

A mobile payment and digital wallet service developed and marketed by Apple Inc.

Apple Care

A technical support and warranty service developed and marketed by Apple Inc.

8. Apple Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Apple's products are highly differentiated, making it difficult for substitutes to emerge. The company's strong brand loyalty and ecosystem also reduce the threat of substitutes.

Bargaining Power Of Customers

Apple's customers have some bargaining power due to the availability of alternative products. However, the company's strong brand loyalty and premium pricing strategy mitigate this power.

Bargaining Power Of Suppliers

Apple's suppliers have limited bargaining power due to the company's large scale and global presence. Apple's ability to negotiate prices and terms also reduces supplier power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the technology industry. Apple's strong brand, patents, and established distribution channels also make it difficult for new entrants to compete.

Intensity Of Rivalry

The technology industry is highly competitive, with many established players competing for market share. Apple faces intense rivalry from companies like Samsung, Google, and Amazon.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.32%
Debt Cost 3.95%
Equity Weight 33.68%
Equity Cost 10.09%
WACC 6.01%
Leverage 196.88%

11. Quality Control: Apple Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Cisco

A-Score: 6.2/10

Value: 2.3

Growth: 4.0

Quality: 7.6

Yield: 5.0

Momentum: 9.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
IBM

A-Score: 5.7/10

Value: 1.8

Growth: 3.0

Quality: 6.0

Yield: 6.0

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

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HP

A-Score: 5.6/10

Value: 9.0

Growth: 4.1

Quality: 4.8

Yield: 8.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
NetApp

A-Score: 5.5/10

Value: 3.4

Growth: 5.7

Quality: 7.4

Yield: 5.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
QUALCOMM

A-Score: 5.5/10

Value: 2.5

Growth: 5.9

Quality: 7.4

Yield: 4.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Apple

A-Score: 5.1/10

Value: 1.0

Growth: 6.1

Quality: 7.4

Yield: 0.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

264.58$

Current Price

264.58$

Potential

-0.00%

Expected Cash-Flows