Apple CEO John Ternus has called the company the best on earth, but investors may need to weigh that claim against its stock performance. Bernstein analyst Mark Newman argues that Apple’s appeal as a tech investment hinges on its ability to offer indirect exposure to AI, leveraging its vast consumer base and hardware demand. The firm maintained an Outperform rating and raised its price target to $380, suggesting about 12% upside from the November 2 closing price of $338.32.
Apple’s fiscal fourth-quarter revenue grew 12% to $114.5 billion, surpassing expectations, with iPhone revenue climbing 17% to $57.6 billion and Mac sales rising 24%. The company forecast 7% to 10% revenue growth for the December quarter, ahead of market estimates. However, profitability concerns loom, as gross margin guidance of 45% to 46% fell short of expectations due to rising memory prices and slower growth in services.
Bernstein trimmed its fiscal 2027 earnings estimate to $9.78 per share from $9.90 and its 2028 estimate to $11.13 from $11.26, citing margins and research spending. Apple’s valuation at 35.1 times forward earnings also raises concerns, as it trades well above its 22.7-times average since 2016, leaving little room for error if hardware costs rise or AI monetization takes longer than expected.