Apple's Safe Haven Illusion Fades as Tariff Refund Distortion Washes Out

Apple's valuation has led to concerns that the company may be overpriced. The June quarter included a one-time tariff refund that added 2 percentage points to gross margin and $0.11 to EPS, but this benefit will not repeat in future quarters.

The stock has surged 23% since Q2 earnings while the S&P 500 fell 3%, pushing shares above all 47 analysts' consensus price target of $319.72. Apple's forward P/E of 36 and price-to-book of 47 sit well above its historical mid-20s range.

Despite strong revenue growth in the June quarter, with a 16.4% year-over-year increase to $109.42 billion, and record capital returns, including a fresh $100 billion buyback authorization, bulls argue that the WWDC26 Siri overhaul could trigger a real Apple Intelligence upgrade cycle.

However, the bear case is stronger than it looks. The tariff refund benefit will annualize away, gross margin comps will flip from tailwind to headwind, and memory cost pressure will bite margins just as easy year-over-year iPhone comparisons disappear.