FAST Graphs on $AAPL (Oct 27, 2026)
Apple is an exceptional company but not a wise investment at a P/E of 38.64 while earnings growth has slowed from 25% to 12% over fourteen years, then 9.89% over eight, and analysts expect only about 10.5%. Returning to fair value implies a -20% annual return; at its 5-year normal multiple with 10% growth, only 2.2%. Its P/E of 38 exceeds Nvidia's 26 even though it grows roughly five times slower.
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On the other hand, we have Apple . That's a share of 7.5 percent . Apple tells a completely different story. As you know, we can look at Apple in the same way we looked at Nvidia.
You know that Apple has achieved tremendous growth, but looking at this black line, this black line represents the highest multiple Apple has traded at essentially in its recent history. Well, the price-to-earnings ratio is 38.64.
The problem with Apple, unlike Nvidia, is that Apple has declined from a company growing at 25% to a company growing at 12% over the past fourteen years, down to growth of 9.89% over the past eight years, and so on.
So, Apple is actually slowing down in terms of profits , but the valuation is expanding.
Now, as you know, people are of course embracing Apple . Apple is a very popular stock, isn't it? It is an exceptional company, but paying 33 times the earnings for single-digit growth is not a wise investment.
If we look at the estimates, as you know, analysts are predicting growth of 10.5 percent. So, if it returns to trading at its fair value, as you know, we can expect a potential annual rate of return of -20% on your investment.
If you retreat to trade at its 5-year normal multiple, while the company grows by 10%, you will only earn 2.2% on your money.
Now, doing the same thing, let's take a look at the forecasts and what the analysts expect. As you know, analysts have raised their estimates from what they were 12 months ago.
They are a little optimistic, but otherwise they are rather neutral. So , analysts are keeping their track of this company, and you know, it's not like Apple is going to explode out of nowhere.
It's not as if they're going to achieve potential growth of 50 % like Nvidia is.
First, Apple, whether it 's growing or not, is trading at a higher price-to-earnings ratio than Nvidia. As you know, the ratio is 38 compared to 26, and it is growing at a rate approximately five times lower than Nvidia's growth rate .
So, there are risks concentrated in these two companies, right?
As we saw with Microsoft and Apple , especially Apple which is the second largest holding and is growing at only 10% annually, but has one of the highest multiples on this list, right?