AAPL
Apple Inc.NasdaqValuation snapshot
Above bull caseOut of datePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Aug 13, 2026
What drives AAPL's base case?
base-case thesisApple's last twelve months brought in $466.8 billion, with each of the last three quarters growing about 16% — a real reacceleration from the flat 2023-2024 stretch. Apple has already told investors the current quarter slows to 9-11%, so this case starts there and lets growth ease down over five years toward the roughly 6.6% yearly pace Apple actually averaged from 2018 to 2025 and then toward the economy's growth rate. On profitability, the last three quarters earned about 33.6 cents of operating profit per dollar of sales versus about 32 cents last year, and this case holds near the current level: a growing subscription and app business with better economics offsets the end of one-time tariff refunds and research spending that now exceeds a tenth of sales. Because Apple rents its AI capability from Google rather than building data centers, it keeps spending under 3 cents per dollar of sales on new equipment, leaving unusually large amounts of cash for shareholders.
What shapes the assumptions
Management-guided September-quarter growth of 9-11%
Quarterly revenue growth easing from 16.4% in Q3 FY2026
Informs revenue growth
Services growing 12% on a large installed base
Services revenue of $30.7B, roughly 28% of quarterly revenue
Raises operating margin
Asset-light AI strategy via Gemini licensing keeps capex under 3% of sales
Capital expenditures of $13-14B against a ~$477B revenue base
Lowers reinvestment
Effective tax rate trending up but below the 21% statutory rate
Nine-month FY2026 effective tax rate of 17.6% versus 15.4% a year earlier
Raises tax rate
Scale of a $466.8B revenue base forces convergence to economy-wide growth
FY2018-FY2025 revenue CAGR of roughly 6.6% including three down years
Lowers terminal growth
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 28.9% a year. Over the last 5 years it grew 6.1% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- How much of this is timing?
- The price has risen 8.6% since this valuation was struck on 2026-08-13, so some of the gap opened up after these figures were set.
- Or, holding growth steady
- the price is also consistent with a 84.4% operating margin, against the 33.5% assumed here.
- How confident is this estimate?
- Robustness 58.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Out of date. Financials have been published or corrected since this valuation was generated. An admin can recalculate it to fold in the new financials.
Base inputs from financials
source period →Base revenue (TTM)
$466.8B
Diluted shares
14,714,676,000
Net cash
-$19.9B
Bear
low confidence$88.21
IV / share
-73.1% vs $328.21
- Explicit cash flows
- $26.00
- Terminal value
- $63.56
- Net cash
- -$1.36
- Intrinsic value / share
- $88.21
72.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.0% → 0.0% → 1.5% → 2.0% → 2.0%medium
How derived: Apple's trailing twelve months of $466.8B reflects three straight ~16% quarters that management attributed to demand that 'far exceeded expectations,' and its own guidance already steps the September quarter down to 9-11%; this case assumes that spike is a pull-forward upgrade cycle that mean-reverts the way Apple's actual history did in FY2016 (-7.7%), FY2019 (-2.0%) and FY2023 (-2.8%), leaving near-flat revenue against a bloated FY2026 base.
Why this confidence: Company's own September-quarter revenue guidance anchors year one ↑, Apple's repeated historical pattern of post-supercycle revenue declines ↑, Five-year forecast horizon for a consumer-hardware cycle ↓, Timing and magnitude of the next upgrade wave is unknowable from filings ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple guided the September 2026 quarter to 9-11% revenue growth, a deceleration from the 16% posted in each of the first three quarters of FY2026, and flagged an FX headwind of about 2.5 percentage points.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's reported annual revenue has fallen outright in three of the last ten fiscal years (FY2016 -7.7%, FY2019 -2.0%, FY2023 -2.8%), each time following a strong iPhone upgrade year.[Apple annual revenue history]· secondary
- Management disclosed supply constraints on advanced-node SOCs that will more significantly affect iPhone, Mac and iPad in the September quarter, capping unit shipments regardless of demand.[Apple Q3 FY2026 earnings call transcript]· primary
Evidence against
- Apple posted a record June quarter of $109.4B, up 16% year over year, with iPhone up 22% and Mac up 29% — the strongest hardware momentum in years, not a fading cycle.[Apple reports third quarter results]· primary
- Services revenue reached $30.7B in Q3 FY2026, up 12% year over year, providing a recurring, install-base-driven revenue layer that damps hardware cyclicality.[Apple Q3 FY2026 earnings call transcript]· primary
Operating margin30.5%medium
How derived: Apple's three FY2026 quarters produced a revenue-weighted operating margin of roughly 33.6% versus about 32.0% in FY2025, but that expansion leans on scale over a record revenue base and on a September-quarter gross margin guide that management said includes about one point of tariff-refund benefit; this case assumes volumes fall back, that one-time benefit lapses, and R&D — already above 10% of sales on AI — stays elevated, pulling margin below the FY2025 level.
Why this confidence: Four quarters of reported segment-level margin data in the actuals ↑, Management quantified the non-recurring tariff-refund benefit ↑, Tariff and trade policy path over five years is unpredictable ↓, Requires assuming margin reverses a clearly established uptrend ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple's September-quarter gross margin guidance of 47-48% explicitly includes an expected one percentage point benefit from tariff refunds, a benefit that does not recur.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's R&D spending has climbed past 10% of revenue as AI creates a 'sense of urgency,' a fixed-cost layer that compresses margin if revenue stops growing.[Apple's R&D investments top 10% of sales]· secondary
- Apple's reported quarterly operating margin was 30.0% as recently as Q3 FY2025, showing the low-30s is a level the company has actually operated at within the last twelve months.[Apple Q3 FY2026 Form 10-Q]· primary
Evidence against
- Apple guided September-quarter gross margin to 47-48%, near the high end of its historical range, suggesting structural rather than purely cyclical margin strength.[Apple Q3 FY2026 earnings call transcript]· primary
- Q3 FY2026 EPS rose 29% year over year against 16% revenue growth, evidence of genuine operating leverage rather than a one-off.[Apple reports third quarter results]· primary
Tax rate18.5%high
How derived: Apple's 10-Q reports an effective tax rate of 17.9% for Q3 FY2026 and 17.6% for the first nine months, up from 16.4% and 15.4% a year earlier because of a higher effective rate on foreign earnings; this case extends that upward drift and assumes the discretionary benefits Apple cites — unrecognized tax benefit releases and share-based compensation windfalls — shrink, pushing the rate toward the 21% statutory federal rate.
Why this confidence: Exact effective rate disclosed in the quarterly SEC filing ↑, Company explains the drivers of the rate change in the same filing ↑, Bounded between the 17.6% actual and the 21% statutory ceiling ↑, Multi-year international tax policy changes are not yet legislated ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple's effective tax rate rose to 17.9% in Q3 FY2026 from 16.4% in Q3 FY2025, which the company attributes primarily to a higher effective tax rate on foreign earnings.[Apple Q3 FY2026 Form 10-Q]· primary
- Apple's nine-month FY2026 effective tax rate of 17.6% is 220 basis points above the 15.4% recorded in the comparable FY2025 period, a clear year-over-year upward trend.[Apple Q3 FY2026 Form 10-Q]· primary
Evidence against
- Management guided to a tax rate of roughly 16.5%, below both the nine-month actual and this bear assumption.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's 10-Q states its rate stays below the 21% U.S. statutory rate because of durable structural items including the federal R&D credit, which its rising R&D spend should enlarge rather than shrink.[Apple Q3 FY2026 Form 10-Q]· primary
Reinvestment rate18.0%low
How derived: Apple's capex is running about $13-14B against roughly $477B of FY2026 revenue — under 3% of sales, because it licenses AI rather than building data centers — but this case assumes that asset-light posture cannot hold: the disclosed Broadcom custom-silicon agreement exceeding $30B and the new Houston Advanced Manufacturing Center point to rising committed spend, and a company reinvesting this little while barely growing implies it must eventually spend more to defend its position.
Why this confidence: Apple does not guide capital expenditures explicitly ↓, Capex figures come from secondary press rather than a filing ↓, Broadcom commitment size is disclosed by management ↑, Assumes a strategy reversal not yet evidenced in reported spending ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple disclosed a multi-year agreement with Broadcom exceeding $30 billion for custom silicon design and production, plus a new Advanced Manufacturing Center in Houston to assemble Mac mini.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's supply constraints stem from limited availability of advanced process nodes for its own SOCs, a bottleneck that typically requires prepayments or capacity commitments to relieve.[Apple Q3 FY2026 earnings call transcript]· primary
Evidence against
- Apple's projected FY2026 capital expenditures of $13-14 billion are only modestly above FY2025's $12.72 billion, showing no step-change in capital intensity.[Apple sitting out the AI spending war]· secondary
- Apple licenses AI capability from Google's Gemini rather than building data-center infrastructure, structurally avoiding the capex hyperscalers are absorbing.[Apple AI Google Gemini 2026 spending and strategy]· secondary
Terminal growth2.0%medium
How derived: Apple grew revenue from $265.6B in FY2018 to $416.2B in FY2025, a compound rate near 6.6%, but three of those years were outright declines; a mature smartphone franchise facing saturated developed markets should settle at or below long-run nominal GDP, so this case caps perpetual growth at 2%, well under the 4.68% 10-year Treasury yield that bounds any sustainable terminal rate.
Why this confidence: Bounded below the observable 10-year Treasury yield ↑, Grounded in Apple's own multi-decade reported revenue record ↑, Perpetual assumptions are inherently unverifiable ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple's revenue declined year over year in FY2016, FY2019 and FY2023, demonstrating that its long-run growth floor includes outright contraction years.[Apple annual revenue history]· secondary
- The 10-year U.S. Treasury yield of about 4.68% sets an upper bound on any defensible perpetual growth rate; 2% leaves ample margin.[Federal Reserve H.15 Selected Interest Rates]· primary
Evidence against
- Services grew 12% year over year to $30.7B in Q3 FY2026 and is a recurring, install-base-linked stream that could sustain terminal growth above general inflation.[Apple Q3 FY2026 earnings call transcript]· primary
Base
medium confidence$129.41
IV / share
-60.6% vs $328.21
- Explicit cash flows
- $34.56
- Terminal value
- $96.21
- Net cash
- -$1.36
- Intrinsic value / share
- $129.41
74.3% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth7.5% → 6.0% → 5.0% → 4.2% → 3.5%medium
How derived: Apple exits FY2026 growing 9-11% by its own guidance after three quarters at roughly 16%, so this case starts just below that exit rate and decays it toward the ~6.6% compound growth Apple actually delivered from FY2018 to FY2025 and then toward nominal GDP, reflecting a large installed base and a Services line growing 12% that cushions but cannot fully offset hardware's natural deceleration off a record base.
Why this confidence: Year-one anchored to explicit management revenue guidance ↑, Decay path calibrated to Apple's own eight-year reported CAGR ↑, Five-year horizon spans at least two product cycles ↓, Currency and supply variables management has flagged but not quantified past one quarter ↓
No tracked driver measures this assumption yet.
Price implies: 28.9% vs our 5.2% — one of several sets that fit this price
Evidence for
- Apple guided the September 2026 quarter to 9-11% revenue growth, providing a company-sourced starting point for the forecast.[Apple Q3 FY2026 earnings call transcript]· primary
- Services revenue of $30.7B grew 12% year over year in Q3 FY2026, a recurring layer roughly 28% of quarterly revenue that grows more steadily than hardware.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's reported revenue rose from $265.6B in FY2018 to $416.2B in FY2025, a compound annual rate near 6.6% across a full cycle including three down years.[Apple annual revenue history]· secondary
Evidence against
- Supply constraints on advanced-node SOCs are expected to more significantly affect iPhone, Mac and iPad in the September quarter, meaning near-term growth may undershoot underlying demand.[Apple Q3 FY2026 earnings call transcript]· primary
- Management expects roughly a 5 percentage point FX headwind to Services year-over-year growth from the March through September quarters, a drag not present in the historical CAGR.[Apple Q3 FY2026 earnings call transcript]· primary
Operating margin33.5%high
How derived: The three reported FY2026 quarters give a revenue-weighted operating margin of about 33.6% versus roughly 32.0% for FY2025, and this case holds near that realized level on the view that a rising Services mix and the gross-margin guide of 47-48% offset the loss of the one-point tariff-refund benefit and R&D running above 10% of sales.
Why this confidence: Eight quarters of reported operating margin in the given actuals ↑, Assumption set essentially at the realized nine-month level, not an extrapolation ↑, Company gross-margin guidance corroborates the level ↑, Tariff and component-cost policy is an unhedged five-year variable ↓
No tracked driver measures this assumption yet.
Price implies: 84.4% vs our 33.5% — one of several sets that fit this price
Evidence for
- Apple guided September-quarter gross margin to 47-48%, consistent with sustaining a low-to-mid 30s operating margin.[Apple Q3 FY2026 earnings call transcript]· primary
- Reported operating margin was 35.4% in Q1 FY2026, 32.3% in Q2 and 32.6% in Q3 — each above the corresponding FY2025 quarter (34.5%, 31.0%, 30.0%).[Apple Q3 FY2026 Form 10-Q]· primary
Evidence against
- About one percentage point of the guided gross margin comes from expected tariff refunds, an item that will not repeat in future years.[Apple Q3 FY2026 earnings call transcript]· primary
- R&D has climbed above 10% of revenue as Apple responds to competitive AI pressure, adding a fixed cost that resists reduction.[Apple's R&D investments top 10% of sales]· secondary
Tax rate17.2%high
How derived: The 10-Q reports a 17.6% effective rate for the first nine months of FY2026 while management guides to roughly 16.5%, so this case sets 17.2% between the realized figure and the guide, reflecting Apple's disclosed structural drivers — lower foreign rates, the federal R&D credit and share-based compensation benefits — that keep the rate below the 21% statutory level.
Why this confidence: Exact effective rate disclosed in the SEC filing ↑, Corroborated by explicit management tax-rate guidance ↑, Assumption sits inside the guided-to-actual range ↑, Global minimum-tax regimes could shift the rate over five years ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple reported a 17.6% effective tax rate for the nine months ended June 27, 2026, on a $21,638 million provision.[Apple Q3 FY2026 Form 10-Q]· primary
- Management guided to a tax rate of approximately 16.5%, bracketing the assumption from below.[Apple Q3 FY2026 earnings call transcript]· primary
Evidence against
- The nine-month FY2026 rate of 17.6% is well above the 15.4% recorded a year earlier, showing the rate is trending up rather than stable.[Apple Q3 FY2026 Form 10-Q]· primary
Reinvestment rate14.0%medium
How derived: Apple's FY2026 capital spending of roughly $13-14 billion is under 3% of a revenue base near $477 billion because it licenses AI from partners rather than building data centers, so net reinvestment absorbs only a modest slice of after-tax operating profit; this case sets 14% to cover ongoing net capex, the disclosed Broadcom silicon commitment and U.S. manufacturing build-out, and normal working-capital needs at mid-single-digit growth.
Why this confidence: Capex level is small and stable relative to revenue, limiting error ↑, Apple does not issue formal capital expenditure guidance ↓, Capex figures sourced from press rather than a filing ↓, Broadcom and manufacturing commitments create upward uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple's projected FY2026 capital expenditures are $13-14 billion, up only modestly from $12.72 billion in FY2025, against roughly $477 billion of revenue.[Apple sitting out the AI spending war]· secondary
- Apple licenses Gemini from Google for Siri and related capabilities instead of building its own AI data-center infrastructure, keeping capital intensity structurally low.[Apple AI Google Gemini 2026 spending and strategy]· secondary
Evidence against
- Apple disclosed a Broadcom agreement exceeding $30 billion and a new Houston Advanced Manufacturing Center, commitments that raise forward capital and supply-chain outlays above the historical run-rate.[Apple Q3 FY2026 earnings call transcript]· primary
- R&D above 10% of sales represents a large growth investment that sits in operating expense rather than capex, understating Apple's true reinvestment burden.[Apple's R&D investments top 10% of sales]· secondary
Terminal growth2.5%medium
How derived: Apple compounded revenue at roughly 6.6% from FY2018 to FY2025 across a full cycle, but a franchise of this scale must eventually converge to nominal GDP; this case sets perpetual growth at 2.5% — above pure inflation because Services is growing 12% and recurring, yet far below the 4.68% 10-year Treasury yield that caps any sustainable terminal rate.
Why this confidence: Bounded below the observable risk-free rate ↑, Consistent with long-run nominal GDP for a mature global franchise ↑, Perpetuity assumptions cannot be validated against any filing ↓
No tracked driver measures this assumption yet.
Evidence for
- The 10-year U.S. Treasury yield of about 4.68% on August 12, 2026 provides a hard upper bound well above the 2.5% assumed.[Federal Reserve H.15 Selected Interest Rates]· primary
- Services revenue grew 12% year over year to $30.7B in Q3 FY2026, a recurring stream tied to a growing installed base that supports above-inflation perpetual growth.[Apple Q3 FY2026 earnings call transcript]· primary
Evidence against
- Apple's revenue fell in FY2016, FY2019 and FY2023, showing the business is capable of multi-year stagnation rather than steady perpetual growth.[Apple annual revenue history]· secondary
Bull
low confidence$178.95
IV / share
-45.5% vs $328.21
- Explicit cash flows
- $44.16
- Terminal value
- $136.14
- Net cash
- -$1.36
- Intrinsic value / share
- $178.95
76.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth12.0% → 10.0% → 8.5% → 7.0% → 5.5%low
How derived: Apple grew 15.7%, 16.6% and 16.4% in the three FY2026 quarters and management stated that iPhone and Mac demand 'far exceeded expectations' with shipments limited by advanced-node SOC availability — meaning reported revenue understates true demand; this case assumes those constraints ease and an AI-driven replacement cycle across a roughly 2.4-billion-device installed base sustains low-double-digit growth before decaying toward the mid-single digits.
Why this confidence: Management explicitly disclosed demand exceeding supply ↑, Assumed year-one growth exceeds the company's own guidance range ↓, Requires a multi-year upgrade cycle to persist beyond any guided period ↓, Long forecast horizon at above-trend growth off a $466.8B base ↓
No tracked driver measures this assumption yet.
Evidence for
- Management attributed September-quarter supply constraints to advanced-node SOC availability driven by iPhone and Mac demand that 'far exceeded expectations' — unmet demand that carries into future periods.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple posted a record June quarter with revenue up 16%, iPhone up 22% and Mac up 29% year over year.[Apple reports third quarter results]· primary
- Apple has previously delivered sustained double-digit expansion off a large base, growing revenue 33.3% in FY2021 and 15.9% in FY2018.[Apple annual revenue history]· secondary
Evidence against
- Apple's own guidance for the September 2026 quarter is 9-11% growth, below the 12% assumed for the first forecast year.[Apple Q3 FY2026 earnings call transcript]· primary
- Management expects a roughly 5 percentage point FX headwind to Services growth and a 2.5 point sequential FX drag on total revenue.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's revenue was essentially flat from FY2022 ($394.3B) to FY2024 ($391.0B), showing that double-digit growth has not been the norm at this scale.[Apple annual revenue history]· secondary
Operating margin37.0%low
How derived: Apple already printed a 35.4% operating margin in the seasonally strong Q1 FY2026 quarter and guides September gross margin to 47-48%, near its historical high; this case assumes rising Services mix — a segment structurally more profitable than hardware — plus operating leverage over a fixed R&D base carries full-year operating margin to 37%, roughly the level Q1 demonstrates is achievable at volume.
Why this confidence: A single reported quarter (Q1 FY2026 at 35.4%) supports the level ↑, Target exceeds every full-year margin in the historical actuals ↓, Depends on Services mix shift that Apple does not guide to ↓, Rising R&D and lapsing tariff refunds push the other way ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple reported a 35.4% operating margin in Q1 FY2026, demonstrating the level the cost structure reaches at high volume.[Apple Q3 FY2026 Form 10-Q]· primary
- Q3 FY2026 EPS grew 29% year over year on 16% revenue growth, showing profit compounding materially faster than sales.[Apple reports third quarter results]· primary
- Apple guided September-quarter gross margin to 47-48%, at the upper end of its recent historical range.[Apple Q3 FY2026 earnings call transcript]· primary
Evidence against
- About one percentage point of the guided gross margin is a non-recurring tariff-refund benefit rather than structural improvement.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's nine-month FY2026 revenue-weighted operating margin was about 33.6%, and no full fiscal year in the given actuals has reached 37%.[Apple Q3 FY2026 Form 10-Q]· primary
- R&D spending above 10% of revenue is rising to fund AI, working against margin expansion.[Apple's R&D investments top 10% of sales]· secondary
Tax rate16.5%medium
How derived: Management guided to a tax rate of roughly 16.5%, below the 17.6% nine-month reported figure, and Apple's 10-Q identifies durable reasons the rate sits under the 21% statutory level — a lower effective rate on foreign earnings, the U.S. federal R&D credit and share-based compensation benefits; this case takes management's guide at face value on the view that a rising R&D base enlarges the credit.
Why this confidence: Explicit management guidance for the specific metric ↑, Filing discloses the structural drivers keeping the rate low ↑, Guidance sits below the actually reported nine-month rate ↓, Guidance covers one year, not the five-year forecast horizon ↓
No tracked driver measures this assumption yet.
Evidence for
- Apple's CFO guided to a tax rate of approximately 16.5% on the Q3 FY2026 earnings call.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's 10-Q attributes its sub-statutory rate to the U.S. federal R&D credit among other items; R&D above 10% of sales should expand that credit.[Apple Q3 FY2026 Form 10-Q]· primary
Evidence against
- Apple's actual nine-month FY2026 effective rate was 17.6% and Q3 alone was 17.9% — both above the 16.5% guide — driven by a higher effective tax rate on foreign earnings.[Apple Q3 FY2026 Form 10-Q]· primary
Reinvestment rate11.0%low
How derived: Apple spends only $13-14 billion of capital per year — under 3% of sales — while peers pour hundreds of billions into AI data centers, because Apple licenses Gemini from Google rather than owning the infrastructure; this case assumes that capital-light posture persists so that even low-double-digit revenue growth is funded from a small slice of after-tax operating profit, with depreciation covering most of gross capex.
Why this confidence: Apple issues no formal capital expenditure guidance ↓, Capex figures come from secondary press, not a filing ↓, Pairs low reinvestment with high growth, an internally demanding combination ↓, Apple's historically low capital intensity is a long-standing, observable pattern ↑
No tracked driver measures this assumption yet.
Evidence for
- Apple is on track to generate roughly $140 billion of free cash flow on under $13 billion of capital spending, an exceptionally low reinvestment burden relative to profit.[Apple sitting out the AI spending war]· secondary
- Apple licenses AI capability from Google's Gemini for Siri rather than building data centers, while Amazon, Microsoft, Meta and Alphabet collectively spend $650-700 billion on AI infrastructure in 2026.[Apple AI Google Gemini 2026 spending and strategy]· secondary
Evidence against
- Apple disclosed a Broadcom agreement exceeding $30 billion for custom silicon plus a new Houston manufacturing center, commitments that raise forward capital intensity.[Apple Q3 FY2026 earnings call transcript]· primary
- Advanced-node SOC supply is already the binding constraint on Apple's shipments, implying capacity investment may be required to sustain double-digit growth.[Apple Q3 FY2026 earnings call transcript]· primary
Terminal growth2.8%low
How derived: Services grew 12% year over year to $30.7 billion in Q3 FY2026 and is roughly 28% of revenue, so as that recurring, install-base-linked mix rises the blended long-run rate should exceed pure inflation; this case sets 2.8% — above nominal-GDP-only assumptions but still far below the 4.68% 10-year Treasury yield that bounds any sustainable perpetual rate.
Why this confidence: Bounded well below the observable risk-free rate ↑, Perpetual growth above long-run nominal GDP is a demanding assumption ↓, Relies on a Services mix shift that extends far past any guided period ↓
No tracked driver measures this assumption yet.
Evidence for
- Services revenue reached $30.7B in Q3 FY2026, up 12% year over year, a recurring stream growing well above inflation.[Apple Q3 FY2026 earnings call transcript]· primary
- The 10-year U.S. Treasury yield of about 4.68% leaves substantial headroom above the 2.8% assumed perpetual rate.[Federal Reserve H.15 Selected Interest Rates]· primary
Evidence against
- Management expects roughly a 5 percentage point FX headwind to Services year-over-year growth through the September quarter, showing the reported 12% is not a clean structural rate.[Apple Q3 FY2026 earnings call transcript]· primary
- Apple's total revenue declined in FY2016, FY2019 and FY2023, evidence that even a large installed base does not guarantee steady perpetual growth.[Apple annual revenue history]· secondary
Valuation robustness
reliability of the estimate, not a stock rating58 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 74% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- Newer financials have been published since this valuation was computed.→ base inputs
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q2 2025 | 5.1% | 1.39 | 3.6% | 15.06B | -2.6% |
| Q3 2025 | 9.6% | 1.63 | -6.2% | 14.95B | -2.6% |
| Q4 2025 | 7.9% | — | — | -47.03M | 14.6% |
| Q1 2026 | 15.7% | 3.48 | 95.4% | 14.81B | -2.2% |
| Q2 2026 | 16.6% | 1.82 | 30.9% | 14.73B | -2.2% |
| Q3 2026 | 16.4% | 2.17 | 32.8% | 14.71B | -1.6% |
Valuation history every run
Why intrinsic value changed
Why
No sourced event is linked to this change yet — the researched assumption moved without a cited driver observation behind it.
Why
No sourced event is linked to this change yet — the researched assumption moved without a cited driver observation behind it.
Why
No sourced event is linked to this change yet — the researched assumption moved without a cited driver observation behind it.
Why
No sourced event is linked to this change yet — the researched assumption moved without a cited driver observation behind it.
Sequential deterministic bridge · order-dependent contributions · exactly reconciled
Market inputs researched
The 10-year U.S. Treasury constant maturity yield is the standard risk-free proxy for a USD-denominated long-horizon DCF, and it stood at about 4.68% on August 12, 2026, the most recent daily observation before the valuation date.
AAPL's 5-year monthly beta versus the S&P 500 is reported at 1.09 as of August 2026, indicating slightly above-market systematic risk, which is consistent with a mega-cap consumer-hardware franchise whose earnings carry cyclical iPhone exposure.
Damodaran's implied ERP for the U.S. market — derived from the index level and expected cash flows from dividends and buybacks rather than from historical averages — was 4.23% as of January 2026, which is the forward-looking premium consistent with pricing an S&P 500 constituent today.
The most recent closing price for AAPL prior to the valuation date was $302.25 on August 12, 2026, against a 52-week high of $344.57 and an all-time closing high of $339.79 set on July 28, 2026.
Apple's outstanding notes trade at yields in the high-3s to mid-4s at short maturities, and adding the roughly 40-60 basis point spread that Aaa/Aa-rated seasoned corporates carry over the 4.68% 10-year Treasury gives a pre-tax marginal cost of long-term debt near 5.2% for Apple's $82.3 billion of borrowings.
Generated 8/13/2026, 3:04:08 PM · pipeline v1.1.0