Parkev Tatevosian, CFA on $AAPL (Nov 3, 2026)

Apple announced that its net sales rose to $114.5 billion as iPhone sales boomed . However, Apple's stock price fell by more than 3% following the release of the company's quarterly financial results.

So why did the stock price drop and is this a buying opportunity? These are the questions I want answered after reviewing the company's quarterly financial statements . Surprisingly, Apple's product sales outperformed its services sales in the last quarter ending September 26, 2026.

I say it's surprising because the company's product sales usually perform better during the holiday quarter, which is the next quarter. In addition, the company was preparing to announce a new and massive iPhone, which it did by launching the "Two iPhones," and was surprised to see many buyers purchasing the iPhone before the release of that new product.

In addition, Apple, as it always has, did a great job of controlling costs, even with rising component inflation, and its operating income rose by $3.2 billion year-over-year to $35.6 billion, representing an overall increase of approximately 10%.

The high costs of memory and storage negatively affect Apple's business due to the input costs it pays to integrate those products into its devices .

Whether you're buying an iPad, iPhone, or MacBook Pro, you need memory and storage, and the prices of those components have risen by more than three figures since the AI ​​oom .

Apple is also one of the few US companies that has made significant improvements and performed well in China in the last quarter, with sales in the region rising to $17.5 billion, compared to $14.5 billion in the same period last year.

For the nine months that ended in the last quarter. Its sales jumped to $82.4 billion, up from $64 billion in the same period of the previous year. iPhone sales were a major bright spot for Apple , rising to $57.6 billion, compared to $49 billion in the same period last year.

For the entire year, iPhone sales jumped to $254 billion, up from $209 billion, even amid rumors of a massive upgrade cycle to come.

The "iPhone Duo" is already sold out, and you will have to wait until mid-January to receive your phone if you order today. This means that current iPhone sales are likely to be undervalued at 10 million units for the "dual iPhone" only, and that the average selling price is much higher than it was in the previous iPhone upgrade cycle.

Apple outperformed its peers in 2026 because it did not spend heavily on artificial intelligence, yet it still achieved strong revenue growth. In fact, in its most recent quarter , its assets, plants and equipment were valued at only $52 billion after deducting depreciation .

Amazon spent nearly $80 billion in this category in its most recent quarter alone. This is just to give you perspective on the sheer size of the difference in range between Apple and its peers.

Apple has maintained its asset-light business model. It did not invest in artificial intelligence. It did not invest in manufacturing. Consequently, it was able to achieve sales growth without expanding its asset base, allowing the company to maintain its excellent balance sheet .

This is where Apple's biggest advantage over other major technology companies comes in: cash flow. It generated $145 billion in cash flow from operations in the last 12 months , up from $111 billion in the same period last year.

Since it did not need to invest in capital expenditures, it barely spent $9 billion in this category. Its free cash flow is undisputedly best in its class, allowing Apple to use that cash to repurchase shares and reduce the number of outstanding shares.

It spent a staggering $86 billion on share buybacks in the previous 12 months.

So, with all these positives, why is Apple's stock price down by more than 3.25 percent in after-hours trading? This is mainly due to Apple's stock performance prior to the release of these quarterly earnings results .

Apple's stock had already risen by more than 20% since the start of 2026, nearly doubling the S&P 500 and outperforming its peers among major technology companies .

Its valuation has become high, just as I had previously warned investors. The stock was trading at a forward price-to-earnings ratio exceeding 34. In addition, when calculated using the discounted cash flow model, the company was valued at $204, while the current market price was $338 before these results.

So , to answer the question, do I think Apple stock represents a buying opportunity after this slight decline? I don't think so. I still believe that Apple's stock is overvalued despite the company's excellent performance, and I will wait for a better price to enter.