Apple (AAPL) iPhone Demand Stays Strong as Profits Grow a Solid 22%

Stock (Symbol)

Apple (AAPL)

Stock Price

$277

Sector

Data is as of

Expected to Report

Company Description

Apple Inc. (Apple) designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories and sells a range of related services.

The Company’s products include iPhone, Mac, iPad, AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and accessories.

The Company operates various platforms, including the App Store, which allows customers to discover and download applications and digital content, such as books, music, video, games and podcasts.

Apple offers digital content through subscription-based services, including Apple Arcade, Apple Music, Apple News+, Apple TV+ and Apple Fitness+.

Apple also offers a range of other services, such as AppleCare, iCloud, Apple Card and Apple Pay.

Apple sells its products and resells third-party products in a range of markets, including directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force. Source: Refinitiv

Sharek’s Take

Apple designs, manufactures, and markets smartphones, personal computers, tablets, and wearables. accessories, and related services. Services include advertising on its platforms, AppleCare technical support, and the App Store for customers to download applications and digital content such as books, music, games, and podcasts.

Here’s some AAPL stats from last qtr:

• iPhone (51% of total company revenue): +22% year-over-year sales growth.
  • iPhone saw strength around the world, reaching all-time revenue record despite supply constraints.
  • Growth was driven by the iPhone 17 family.
• Services revenue (28% of total company revenue): +16% year-over-year growth.
  • Services reached an all-time revenue record of $31 billion, with broad-based growth across developed and emerging markets.
  • Growth was driven by record paid accounts, record transacting accounts, and strength across most Services categories.
• Wearables, Home, and Accessories (7% of total company revenue): +5% revenue growth.
  • Wearables, Home, and Accessories revenue increased year over year, with the wearables installed base reaching an all-time high.
  • Growth was driven by strength in wearables and accessories, including Apple Watch and AirPods.
• Mac (8% of total company revenue): +6% revenue growth.
  • Mac revenue increased year over year despite supply constraints, with the installed base reaching an all-time high.
  • Growth was driven by recent product launches, including MacBook Neo, and strong demand from new Mac customers.
• iPad revenue (6% of total company revenue): +8% revenue growth.
  • iPad revenue increased year over year, with the installed base reaching an all-time high.
  • Growth was driven by the A16-powered iPad and M5-powered iPad Pro.

AAPL is a safe stock with an Estimated Long-Term Growth Rate of 13% a year, and a dividend yield of around half a percent. Management buys back a lot of stock, and that has helped boost the stock price. In Fiscal 2025, management spent $91 billion in stock repurchases. In May 2025, the company increased the dividend for the 13th consecutive year from $0.25 to $0.26 per qtr. AAPL is part of the Conservative Growth Portfolio.

One Year Chart

The P/E is 32 this qtr. I think the P/E can get up to 35.

The Estimated Long-Term Growth Rate of 13% is ok for a safe stock.

Earnings Table

Last qtr, Apple delivered 22% profit growth and beat estimates of 18%. Revenue increased 17% year-over-year, versus estimates of 15%. Products revenue (72% of sales) was up 17% yoy. Services revenue (28% of sales) was -49% year over year.

• Apple set revenue records in every geographic segment, with strong double-digit growth in Greater China, the rest of the Asia Pacific, and nearly every emerging market it tracks, including India.
• The iPhone 17 family continue to drive strong growth, helping Apple reach revenue record in both iPhone users and iPhone upgraders.
• Customer satisfaction remained very high across key categories, including 99% for iPhone 17, 98% for iPad, 97% for Mac, and 96% for Apple Watch.
• Mac revenue was helped by recent launched of Macbook Neo, though results were limited by supply constraints.
• Apple faced supply constraints, mainly in iPhone and Mac during the quarter, and management expects Mac constraints to continue into the next quarter.
• Another concern is rising memory costs. which Apple said will have a bigger impact next quarter.

Annual Profit Estimates increased this qtr.

Qtrly Profit Estimates increased too. Profits are expected to climb 20%, 8%, 3%, and 12% growth over the next 4 qtrs. Analysts think Apple’s revenue growth will grow 15% next qtr. 

Fair Value

This qtr with the stock at $277, the P/E is 32. 

My Fair Value P/E is 35, which equates to $306 a share.

2027 Est sits at $336 a share, upside of 22%.

Note, AAPL has a Fiscal Year End September 30th.

Bottom Line

Apple (AAPL) stock had been great for much of the past decade.

Apple’s got good momentum now as iPhone sales are brisk. Also, we are approaching Fiscal 2027, and my Fair Value for that year is nicely above the recent quote.

AAPL moves up from 12th to 11th in the  Conservative Growth Portfolio Power Rankings.

 Power Rankings

N/A

Aggressive Growth Portfolio

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Conservative Stock Portfolio

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