• With its robust brand positioning, hardware and software ecosystem, and massive installed base of active devices, Apple is a high-quality business.

• Going forward, the iPhone will remain critical to the company’s success, with artificial intelligence developments also in focus.

• Apple shares will move based on earnings growth and any changes to the valuation multiple.

• 10 stocks we like better than Apple ›

Apple (NASDAQ: AAPL) is certainly a favorite among the investment community. That’s because it has been a major driver of portfolio returns. It helps to have Warren Buffett’s endorsement, as the consumer tech titan makes up more than 20% of Berkshire Hathaway‘s public equities portfolio.

This “Magnificent Seven” stock has rocketed 134% higher over the trailing five-year period (as of June 11). It’s now 6% off its all-time high, with shares trading for $295 today.

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Can Apple stock effectively double to reach $600 in five years? It would require a compound annual growth rate of at least 15% with stable valuation multiples.

Here’s what investors should consider to assess the likelihood of this outcome.

Image source: The Motley Fool.

Apple is clearly not a mediocre business.

The company’s brand position is unrivaled. This is aided by a stellar track record of product and service innovations, ease of use, and global appeal. Operating at the premium end of the market supports pricing power, which resulted in a net income margin of 26.6% in the last quarter (second-quarter 2026 ended March 28).

Apple’s ecosystem keeps its customers locked in, introducing high switching costs that support its wide economic moat. The combination of hardware and software creates the walled garden, increasing loyalty.

There’s an incredible distribution advantage at play as well that supports high-margin services revenue. “We have a new record for our installed base with more than 2.5 billion active devices,” outgoing CEO Tim Cook said on the first-quarter 2026 earnings call.

Apple is an unequivocally high-quality business. This isn’t going to change over the next five years. Investors who understand this can invest in Apple with confidence.

Critics have long called out Apple’s slow artificial intelligence (AI) progress. But at its Worldwide Developers Conference, the company revealed new Apple Intelligence features that make its devices more useful across the entire ecosystem.

Apple also announced that after multiple delays, Siri AI will finally launch this year, turning users’ products into more capable personal assistants. Siri AI will be partly powered by Alphabet‘s Gemini family of models.

What matters most is whether Apple’s AI offerings will boost product sales, particularly iPhone sales. The iPhone 17 family was a hit, as its success lifted iPhone revenue by more than 21% year over year in each of the last two fiscal quarters. This might mean weaker upgrade cycles in the next few years, since more people bought these AI-enabled smartphones in recent months.

There are reports that Apple could introduce a foldable iPhone in September. A new form factor can definitely drive consumer enthusiasm. But at an expected starting price of more than $2,000, this product will target a niche audience, so it’s unlikely to move the financial needle much.

Apple generated $451 billion in total revenue in the past 12 months. It’s incredibly difficult to continue expanding the top line at a strong clip when coming off such a massive base.

Investors know that Apple is a great company. Looking ahead, the iPhone and the AI strategy will rule the narrative.

But the key variables that will affect the stock’s return are profit gains and valuation changes. Analysts estimate that Apple’s diluted earnings per share will grow at a compound annual rate of 12.9% between fiscal 2025 and fiscal 2028, which is a healthy outlook.

The stock is expensive, though. It trades at a price-to-earnings ratio of 35.7, which reflects the market’s rosy expectations. There’s a strong likelihood that the valuation will decline going forward.

Over the last five years, Apple has been a wildly successful investment, almost doubling the S&P 500’s returns.

The bulls want the winning returns to continue. Look out to the summer of 2031, however, and I think there is meaningfully less than a 50% chance Apple’s stock price will double in five years. The combination of valuation risk and expected annual growth rates just below the necessary 15% level is just too much.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.