Apple's Stock Price Under Pressure Despite Strong Demand

Apple's stock has stumbled despite its impressive growth, leaving investors wondering if it's a buying opportunity or a warning sign.

The tech giant's operating margin over the last year was 33%, far exceeding the S&P 500 median of 18.4%. This isn't a fluke; Apple's three-year average margin is also dominant at 32%.

The company's financial power is fueled by overwhelming product demand, with iPhone revenue growing 22% from a year ago and Mac revenue surging an impressive 29% in its last reported quarter. Management attributed this to a 'demand forecast issue' where products are 'doing remarkably better than we thought they would do.'

However, the stock's price-to-earnings multiple is 34.8, a significant premium to the S&P 500 median of 23.8. Apple faces real operational hurdles, including rising memory pricing and supply constraints for its iPhone, Mac, and iPad.