AAPL Stock Price Takes Hit Despite Earnings Beat

Apple Inc. (AAPL) reported a mixed bag of quarterly earnings that left investors scratching their heads.

The tech giant delivered both revenue and earnings beats, but the stock price took a 7% hit as markets reassessed its premium valuation multiple.

One reason for the decline is that Apple's gross margin was inflated by tariff refunds, which artificially boosted profits. Additionally, services revenue fell short of expectations, undermining the case for a premium valuation.

The company now trades at 35x forward earnings with just 8% EPS growth, resulting in an unsustainable PEG ratio of 3.2. This would require significant reacceleration to justify the current stock price.