Apple's AI Quarter Beating Estimates: Why It's the Stock to Watch

Apple's AI quarter was its best yet, beating earnings estimates for the ninth consecutive time. The company reported Q3 revenue of $109.42 billion, a 16.4% year-over-year increase, with iPhone sales reaching $54.25 billion and Services hitting a record $30.74 billion.

The 24/7 Wall St. price target for Apple is $364.19 over the next 12 months, implying 9.61% upside from its current price of $332.27. The recommendation is buy, with a 90% confidence rating.

Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are natural AI comparisons, but Apple's asset-light model produces 171.4% return on equity and 32.0% operating margins. While its P/E of 43 is higher than Microsoft's 28 and Alphabet's 15, the bull thesis is that Apple owns the distribution with 2.5 billion active devices, making even modest AI monetization significant.