Apple's June quarter beat was artificially inflated by tariff refunds worth 2 margin points and 11 cents of EPS, masking a bare midpoint guidance miss. AAPL trades at 35 times earnings, trails the S&P 500 year to date, and averages a -1.16% return across its last 10 consecutive earnings beats. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut.
Grab the names FREE today. At $305.93, Apple (NASDAQ:AAPL) looks overvalued. The stock rallied hard off winter lows, but fundamentals are quietly weakening in ways the multiple cannot absorb.
Apple remains the most profitable consumer electronics business on the planet, with a $4.46 trillion market cap, a 2.5 billion device installed base, and Services revenue that hit $30.7 billion last quarter. iPhone drives roughly half of revenue, and the ecosystem around it funds one of the largest capital return programs in market history. Shares climbed from $271.12 at the start of the year to a July high above $340 on a strong June quarter, then faded. That beat was partially manufactured by temporary tailwinds, and the setup into the October earnings report looks materially worse.
Apple delivered its ninth consecutive EPS beat, posting $2.02 on $109.42 billion in revenue, up 16.4% year over year. iPhone revenue grew 22%, Mac grew 29%, and Tim Cook called it the "strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment." Capital efficiency is unmatched. ROE sits at 171%, ROIC at 53%, and management authorized a fresh $100 billion buyback. The all-new Siri AI rollout at WWDC26 gives Apple a plausible AI-cycle upgrade catalyst without the 37.5% of revenue capex burden peers are carrying.
The June headline was propped up by one-time items. CFO Kevan Parekh disclosed that tariff refunds gave gross margin a two percentage point benefit and EPS an 11 cent lift. Strip those out and Apple merely met the midpoint of its own guide.
Cook described memory pricing as a "100-year flood... with exponential increases," and Apple has already reluctantly raised prices on iPad and Mac. Guidance confirmed deceleration. September revenue is guided to 9% to 11% growth, Services below 10%, and gross margin is projected at 47% to 48%, down from the tariff-inflated June earnings report.
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