Apple is back in the $5 trillion value club under new CEO John Ternus. Its stock is outpacing the S&P 500 this year, while investors warm to its approach to AI. At a price-to-earnings ratio of 39, though, the shares have become expensive.
Apple is back in the $5 trillion value club, which it briefly entered as former CEO Tim Cook took leave earlier this year. During Cook's tenure, the stock gained more than 2,600% and the company became the most valuable in the world.
John Ternus, the new CEO, has already presided over several new launches in recent weeks, including the Apple HomeView product. Sitting at the top of the market, however, makes further growth harder.
Shares beat the S&P 500 this year
As of Oct. 16, Apple stock was outperforming the S&P 500 year to date, 27% to 13%. That is more than double the index's growth rate.
The article's author argues that a company already worth $5 trillion cannot gain another 2,600%. Even so, Apple is showing in 2026 that it can still beat the market.
iPhone sales drive the ecosystem
The iPhone accounts for around half of total sales in a given quarter. Computers, watches and tablets interconnect with it, and once a customer buys a first product, they tend to stay in the ecosystem, according to the source.
In the 2026 fiscal third quarter, which ended June 27, total revenue rose 16% year over year, and iPhone sales were up 22%. It was the third quarter in a row with iPhone sales growth above 21%. Ternus, the former leader of hardware engineering at Apple, now has to keep that run going.
Investors warm to Apple's AI approach
Investors are buying the stock because they see Apple as possibly having the right idea about AI. Rather than overspending on AI as some peers do, Apple is focusing on consumer hardware and adding AI services deliberately.
As the price rises, the stock has become expensive. It trades at a price-to-earnings ratio of 39, and the source says that makes it not the ideal time to buy.
Source: Motley Fool
Trading involves risk.
Risk Disclaimer
