Apple Stock Valuation Hinges on Services' Profit Power

Apple's stock valuation is heavily reliant on its Services division, which generated 42.4% of the company's June-quarter gross profit despite only accounting for 28.1% of revenue.

This imbalance highlights the significant contribution of Services to Apple's overall profitability, with a staggering 75.6% gross margin compared to Products' 40.1% margin.

The stock is currently trading at 38.56 times trailing earnings, according to StockAnalysis data dated September 18, indicating that investors are betting on the continued growth of Services to justify the price.