Picture supply: The Motley Idiot
Billionaire investor Warren Buffett has been vocal about his love of Apple (NASDAQ:AAPL), as soon as describing it as “most likely the very best enterprise I do know on the planet”. That conviction exhibits in Berkshire Hathaway‘s portfolio, the place Apple nonetheless represents roughly 20%-22% of disclosed US fairness holdings, value about $66bn-$70bn.
Clearly, that speaks volumes for the inventory — but it surely’s solely the place to begin. When pondering forward 10-20 years, is Apple nonetheless value contemplating in 2026?
The funding case for Apple
Apple’s newest outcomes counsel the expertise large’s nonetheless working at full steam. Within the third quarter of fiscal 2026 (to 27 June), income rose 16% 12 months on 12 months to $109.4bn — a 3rd quarter report.
Diluted earnings per share climbed 29% to $2.02, helped by tariff refunds value about $0.11 per share. iPhone gross sales jumped 22% to $54.3bn, whereas Mac income surged 29% to $10.4bn.
Providers additionally hit a report for the interval, up 12% to $30.7bn. But the inventory fell roughly 6% after the outcomes. Why? Steerage.
Administration expects fourth quarter income progress of simply 9%-11%, beneath the 12% analysts had modelled. CEO Tim Cook dinner warned that offer constraints, significantly in reminiscence chips pushed by the AI information centre growth, will tighten by year-end.
An investor may see sturdy previous outcomes however nonetheless fear about whether or not part shortages and rising prices will cap near-term upside. So does it nonetheless justify the value?
Valuation, forecasts and macro dangers
Wall Avenue’s consensus 12-month value goal sits round $322-$332, implying modest single-digit upside from present ranges. Targets vary extensively, from $215 to $400, reflecting totally different views on Apple’s AI roadmap and China publicity.
Some analysts, together with TD Cowen, have set targets as excessive as $400, whereas others like Barclays stay Underweight with targets close to $245.
One discounted money stream (DCF) mannequin suggests the value could possibly be overvalued by as a lot as 22%. However brokers nonetheless appear optimistic, citing sustained double-digit providers progress, margin growth from selective value hikes, and a sturdy iPhone 18 cycle.
Nonetheless, a number of issues may disrupt that path: reminiscence shortages, overseas trade pressures, and potential regulatory setbacks in China. These have all been tipped as attainable dangers.
With a gross margin already at 50.1% this quarter, even small price will increase may have an outsized affect on profitability.
My verdict
For long-term traders, the query isn’t whether or not Apple’s an awesome enterprise however whether or not at present’s value presents sufficient margin of security given provide constraints and macro uncertainty.
The subsequent AI-driven iPhone cycle could possibly be sufficient of a catalyst to push the shares increased. But when provide chain bottlenecks ramp up part prices, the tight grip it has available on the market may weaken. That might probably check even essentially the most affected person and devoted of Buffett’s followers, and problem the conviction of retail traders watching from the sidelines.
Institutional cash’s significantly fickle. If it flows elsewhere seeking higher danger/reward set-ups throughout the expertise sector and wider market, Apple might want to show its resilience as soon as once more in an more and more aggressive panorama.
Nonetheless, it stays a high-quality compounder with a loyal buyer base and pricing energy. Buffett’s historic endorsements stay related at present and the valuation displays that. Certain, it’s not an inexpensive inventory – but it surely nonetheless deserves consideration.
Must you make investments £5,000 in Apple proper now?
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Mark Hartley doesn’t maintain any positions within the corporations talked about.
