Exploring Apple’s True Worth as Stock Surges on AI and Vision Pro Advances
November 2, 2025
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Wondering if Apple’s sky-high stock price is truly justified or if there’s a hidden value beneath the surface? You’re not alone, and we’re about to dig in together.
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Apple’s share price climbed 2.9% over the last week, is up 4.8% in the past month, and has gained 10.9% year-to-date. Over the past year, the stock has returned 21.9%, and over five years, it has gained 133.8%.
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Recently, Apple’s stock performance has been shaped by ongoing developments in its product pipeline, including the much-talked-about Vision Pro headset and continued advancements in AI integration. Investors and analysts are also buzzing about Apple’s strategic moves in global supply chain management, fueling optimism and debate in equal measure.
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When it comes to the basics, Apple scores just 1 out of 6 on our valuation checks. Next, we’ll explore what those valuation checks mean, plus a smarter way to look at Apple’s true worth at the end of this article.
Apple scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow (DCF) model estimates what a business is worth today by projecting its expected cash flows into the future and then discounting those back to present-day values. This method aims to determine the company’s intrinsic value based on its real money-making ability.
For Apple, the latest figures show it generated $99.89 billion in Free Cash Flow (FCF) over the past year. Analysts project that by 2030, Apple’s FCF could reach $186.84 billion, with 5-year estimates ranging from $128.39 billion in 2026 to $175.68 billion in 2029. It is worth noting that only the next five years of projections come from analysts, while additional years are estimated through extrapolation.
The DCF model applied here estimates Apple’s intrinsic value at $227.58 per share. However, this is roughly 18.8% below the current stock price. According to this model, Apple’s shares are considered overvalued at today’s levels.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Apple may be overvalued by 18.8%. Discover 840 undervalued stocks or create your own screener to find better value opportunities.
For profitable companies like Apple, the Price-to-Earnings (PE) ratio is a widely used valuation metric. It indicates how much investors are willing to pay for each dollar of the company’s earnings and makes it easier to compare the company’s value against its own history, industry averages, and peers.
A “normal” or fair PE ratio is shaped by several factors, including the company’s expected earnings growth and risk profile. Fast-growing and lower-risk companies often command higher PE ratios. Slower growth or higher risk tends to justify lower multiples.
Apple’s current PE ratio stands at 35.7x. This is higher than both the average for its industry, which is 23.1x, and the average for its peers, which is 34.3x. At first glance, this might suggest Apple is trading at a premium compared to other tech companies.
However, Simply Wall St’s proprietary “Fair Ratio” metric provides a more tailored benchmark by considering factors like Apple’s own earnings growth outlook, profit margins, market capitalization, and risks. Unlike a basic industry average or peer comparison, the Fair Ratio aims to show what multiple would truly be justified for Apple’s unique profile.
Apple’s Fair Ratio is calculated to be 43.9x, which is actually higher than its current PE ratio. This suggests that, despite looking expensive versus peers and the wider tech sector, Apple could be trading below what its own fundamentals would justify.
Result: UNDERVALUED
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1415 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives—a smarter and more dynamic way to make your investment decisions. A Narrative is your story behind the numbers, where you define what you believe about Apple’s future revenue, margins, and growth, and link that perspective to a financial forecast and your own fair value.
With Narratives on Simply Wall St’s Community page, you can easily build and update your view of Apple’s future, compare your fair value to the current market price, and see if you think the stock is a buy, hold, or sell. Narratives update automatically as new information, such as company news or earnings, comes in, helping you stay ahead with fresh insights.
For example, some Apple Narratives see fair value much higher, such as $275 per share if you believe in long-term AI-powered growth and resilient earnings. Others are more cautious and set fair value as low as $177, highlighting risks like margin pressure, geopolitics, or slowing product cycles.
By using Narratives, you decide what matters most, and your investment decisions are informed not just by raw numbers but by the thinking behind them.
For Apple, we’ll make it really easy for you with previews of two leading Apple Narratives:
🐂 Apple Bull Case
Fair value: $275.00
Current price is approximately 1.7% below fair value
Revenue growth forecast: 12.78%
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Apple is facing major headwinds from steep US tariffs, risking up to 145% on Chinese imports, but is actively shifting production to India and Vietnam to protect margins.
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The company delivered robust earnings even in this challenging environment, with services revenue hitting record highs and analysts maintaining a “Moderate Buy” consensus.
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Strategic investment in AI and strong brand loyalty is expected to drive long-term growth, with some analysts projecting substantial upside if these trends continue.
🐻 Apple Bear Case
Fair value: $207.71
Current price is approximately 30.2% above fair value
Revenue growth forecast: 6.39%
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Apple’s reliance on emerging markets for future growth may not pay off due to high device costs and significant demographic challenges.
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New EU regulations, costly compliance, and potential loss of key service revenue streams could squeeze margins and threaten top-line growth.
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Risky bets on new technology, such as the Vision Pro headset, may not deliver meaningful returns and could pose additional financial risks if adoption disappoints.
Do you think there’s more to the story for Apple? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include AAPL.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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