Under new CEO John Ternus, and riding a slew of new product releases, Apple’s shares have surged in recent months, leaving the company with little margin for disappointment when it reports fiscal fourth-quarter results after the bell on Monday, according to Bloomberg News’ Ryan Vlastelica.
The stock has climbed 25% from a low in late June, adding roughly $1 trillion in market value. Steady revenue growth and rising free cash flow have positioned Apple as a haven for investors wary of heavy artificial-intelligence infrastructure spending by peers such as Alphabet and Amazon, Vlastelica reports.
See also: Apple’s cash-flow machine makes it investors’ favorite AI hedge – October 23, 2026
Those gains have pushed the shares to their highest levels since 2008. At 36 times earnings expected over the next 12 months, Apple trades at nearly twice the valuation of the S&P 500 Index, according to Bloomberg data. “Apple is in the 99% percentile of its historical valuation, and when something is priced so fully, there’s risk if something unexpected comes along,” said Ben Carew, co-chief investment officer at Tandem Investment Advisors, which holds the stock. “Right now it acts as a flight to safety, but if its growth is weaker than the market anticipates, that would make people feel it isn’t as safe, and we could see the multiple get re-rated.”
The risk is familiar. Three months ago, Apple shares posted their worst one-day decline in 16 months after component shortages pressured its revenue forecast.
Wall Street expects fiscal fourth-quarter revenue to rise 11% to $113.5 billion and net income to increase 6% to $29.2 billion. That would mark Apple’s best year for sales growth since 2021 at 15%.
The report will provide the first substantial look at demand for Apple’s new foldable iPhone Duo, which went on sale last month. The company has described demand as “nothing short of extraordinary,” with delivery times extending into next year. Analysts caution that limited supply may be driving the wait times, and reports of a small number of screens cracking after limited use could cool interest among mainstream buyers.
The Duo marks the biggest design overhaul of Apple’s flagship product in years and starts at $1,999. Bloomberg Intelligence estimates the device could generate $28 billion to $32 billion in fiscal 2027 sales while lifting average selling prices as buyers trade up from Pro and Pro Max models.
Apple’s relative strength was evident last week. Disappointing results from Alphabet and Amazon triggered a selloff in AI-exposed stocks; the Philadelphia Semiconductor Index fell 7.2% on Friday, its worst session since June. Apple declined a more modest 1.2% and overtook Nvidia Corp. to reclaim the title of the world’s most valuable company, with a market capitalization of $5.03 trillion — the first time it held that spot since July.
While Apple’s revenue growth trails most Big Tech peers, it stands out on free cash flow, a metric that has gained importance as investors grow skeptical of the AI spending boom. Free cash flow is projected to expand more than 40% to $141.5 billion in fiscal 2026, with further growth expected in the following three years. By contrast, Alphabet, Meta Platforms, and Amazon face expected free-cash-flow deficits that are set to persist.
“The market appreciates Apple’s strength on free cash flow, and if it can continue with that, I think the stock can generate additional value from current levels,” Daniel Flax, a senior research analyst at Neuberger Berman, told Bloomberg. “Its ability to execute on the product cycle and translate that to strong free cash flow growth is what’s going to matter most for the stock, and the initial signs, at least, are that there’s a lot of interest for the Duo.”
Fewer than 60% of analysts tracked by Bloomberg recommend buying the shares, compared with more than 90% for Microsoft, Amazon, and Meta. The stock also trades above the average analyst price target, the only Magnificent Seven name with a negative implied return over the next 12 months.
“Valuation is the key risk facing Apple, but it does deserve some kind of premium since there is a lot more certainty around its business model,” Carew said. “The volatility we’re seeing elsewhere in tech reflects how uncertain things seem for them. Absent a report that really calls things into question at Apple, which I can’t foresee happening, it should at least remain immune from some of that volatility.”
MacDailyNews Take: Apple remains woefully undervalued.
As always, we will have Apple’s fiscal Q426 results as soon as they are available, right around 1:30pm PT/4:30pm ET, followed by live notes for Apple’s conference call with analysts, expected to feature CEO John Ternus and COO Sabih Khan, beginning at 2:00pm PT/5:00pm ET.
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