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Like most other stocks, Apple (AAPL) has experienced volatility in 2025 due to the escalation of the tariff-driven trade war. Valued at a market capitalization of nearly $3 trillion, the tech stock is down 23% from its all-time highs, trailing the broader markets in the year to date.
Is Apple Stock a Good Buy Right Now?
Apple shares have underperformed in 2025 as the company wrestles with multiple headwinds. The newly imposed tariffs on Chinese imports have threatened Apple’s supply chain, even as President Donald Trump temporarily exempts consumer electronics products from 125% tariffs on Chinese goods. Apple’s heavy dependence on China — both for manufacturing and as a key market — has amplified investor concerns amid rising geopolitical tensions.
Meanwhile, Apple’s revenue growth lags significantly behind its tech sector peers. Wall Street expects Apple sales to rise by 4.3% year over year to $407.92 billion, which is above the 2% growth in fiscal year 2024. However, it is still lower than the growth of the broader tech sector. Additionally, investors have expressed disappointment with Apple’s slow progress in AI integration, particularly delays in its AI-enhanced Siri assistant.
Apple reported record revenue of $124.3 billion for its fiscal Q1 2025, up 4% year-over-year, beating analyst expectations despite ongoing challenges in China. The tech giant also posted all-time high adjusted earnings of $2.40 per share, a 10% increase from the previous year.
CEO Tim Cook highlighted the strategic rollout of Apple Intelligence as a growth catalyst. Cook emphasized that markets where the AI features had been introduced showed stronger iPhone 16 performance compared to regions where it wasn’t yet available. Further, it plans to expand Apple Intelligence to more languages, including French, German, Spanish, Japanese, Korean, and simplified Chinese.
“If you look at iPhone, we did set an all-time record for upgraders, so we’ve never seen a higher level of upgraders before,” Cook told analysts. “The installed base hit a new all-time high as well.”
Services revenue reached an all-time high of $26.3 billion, growing 14% year over year, and gross margins hit 75%. This segment continues to stand out, with Apple now boasting over 1 billion paid subscriptions across its platform.
Mac revenue surged 16% to $9 billion, while iPad revenue jumped 15% to $8.1 billion, both driven by strong adoption of new models. Notably, over half of all iPad purchases came from first-time buyers, expanding Apple’s ecosystem. However, the wearables segment saw a 2% decline to $11.7 billion.
Greater China remained a soft spot, with revenue declining 11% year-over-year, although Cook noted that over half of this drop was due to channel inventory adjustments.
Is AAPL Stock Undervalued In 2025?
Apple expects low- to mid-single-digit revenue growth for the March quarter despite a 2.5% foreign exchange headwind. Services revenue is forecast to grow at low double digits.
Apple’s installed base of active devices reached a new milestone of 2.35 billion, providing a strong foundation for future growth. Its strong balance sheet allowed the iPhone maker to return over $30 billion to shareholders in fiscal Q1, through dividends and share repurchases.
Cook expressed confidence in Apple’s innovation pipeline, stating, “I think there’s a lot more to come and I could not feel more optimistic about our product pipeline,” when asked about future iPhone form factor changes. The hardware giant also highlighted India as a key growth market, where the iPhone was the top-selling smartphone model during the quarter.
With gross margins forecast between 46.5% and 47.5% for the next quarter, Apple continues demonstrating strong financial discipline while investing in next-generation AI capabilities and geographic expansion.
Wall Street expects adjusted earnings to expand to $12.22 per share in the fiscal year 2029, up from $6.75 per share in 2024. If the tech stock is priced at 20x forward earnings, it will trade at $244 per share in early 2029, indicating an upside potential of just 22% from current levels.
Out of the 36 analysts covering AAPL stock, 18 recommend “Strong Buy,” four recommend “Moderate Buy,” 11 recommend “Hold,” and three recommend “Strong Sell.” The average target price for AAPL stock is $244.11, which is well above the current trading price near $200.
