Has Apple Stock Lost Its Shine?
April 16, 2025
This might not be what you want to hear, but here’s the reality — while Apple (NASDAQ: AAPL) remains a brilliant company, it may no longer be a brilliant stock. Let’s be clear: this isn’t about Warren Buffett trimming his Apple stake. It’s about the raw numbers that paint a different picture than what Apple enthusiasts prefer to believe.
Apple is known for innovation, brand power, solid margins, and a large cash reserve. All valid. But as an investment today — with a P/E approaching 35 and limited growth or yields — Apple seems more like a nostalgic favorite than a value driver. These factors are part of our analysis in shaping the High-Quality portfolio, which has beaten the S&P 500 and delivered over 91% in returns since its launch.
High Valuation, Low Returns: The Math Doesn’t Add Up
At a P/E near 35, investors typically expect one of two things:
- Rapid and sustainable growth, or
- Strong yields — via dividends or cash flows.
Apple offers neither.
- Revenue growth over the last 12 months? Just 2.6%.
- Three-year average annual growth? Even lower at 1.5%.
That’s not a growth stock — it’s a mature business sporting a growth multiple.
And when it comes to yield? Also underwhelming.
- Free cash flow yield: <3% — based on approximately $100 billion in free cash flow versus a $3.35 trillion market cap. By comparison, Adobe provides a 5.5% yield, Altria 8.5%, and WRB an impressive 12.5%.
- Dividend yield? Negligible for income-focused investors.
So, why exactly should you still own Apple?
Great Business Is Not Necessarily Great Investment
Let’s not confuse the company with the stock — Apple is undeniably top-tier.
- Outstanding operating margin: Above 30%
- Strong free cash flow margin: Around 25%
- Industry-leading customer loyalty
- Massive ecosystem lock-in
- Robust balance sheet with substantial cash reserves
Still, investing isn’t just about picking great businesses — it’s about buying them at the right valuation. And with Apple trading at 35x earnings, offering minimal growth and weak yields, the stock behaves more like a low-yield bond with tech volatility. Since early 2021, it has delivered limited returns while showing volatility over 1.5x that of SPY.
Can Apple still be a viable swing trade? Definitely. It’s liquid, widely tracked, and responsive to earnings beats and macro headlines. But as a long-term, income-generating, core portfolio asset — the case is far less convincing.
Preserve & Grow Wealth with Risk-Focused Quality Portfolios
We regularly assess stocks to drop those we believe have peaked, as we build and adjust our High Quality Portfolio. With 30 curated stocks, it has consistently outperformed the S&P 500 over the past 4 years. Why? HQ Portfolio stocks have delivered stronger returns with less risk compared to the index — less turbulence, more stability, as shown in our HQ Portfolio performance metrics.
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