This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Key Points
- Apple's June quarter showed reaccelerating growth and record services revenue.
- A record installed base supports ongoing monetization across the ecosystem.
- Capital returns and upcoming product updates strengthen the long-term case.
Apple (NASDAQ: AAPL) heads into Tuesday's product launch event with fresh momentum in both the underlying business and the stock. Shares have climbed recently, prompting a fair question for investors: Did the investment window already close?
I don't think so. The Cupertino-based tech company that makes the iPhone, Mac, iPad, and Apple Watch -- and runs services like the App Store, Apple Music, Apple TV+, iCloud, and Apple Pay -- just put up a strong summer update that bolsters the bull case.
In late July, Apple delivered a June-quarter revenue record and an all-time high in services revenue. And with an upcoming iPhone cycle and feature updates across software, now's a sensible time to revisit the stock.
The short version: The business is nudging back toward growth while leaning more on high-margin, recurring revenue -- and this tailwind of growing high-margin sales looks like one that could persist for a very long time, providing a powerful lift to the business.
Recent results show real momentum
In the third quarter of 2025, Apple's revenue rose 10% year over year to $94 billion, with diluted earnings per share up 12% to $1.57. Management called out June-quarter records for total company revenue, iPhone revenue, and earnings per share -- and said the installed base of active devices reached a new all-time high. That matters because Apple's growing device footprint is the flywheel behind services monetization.
Services continued to do the heavy lifting for the company in fiscal Q3 (Apple's quarter ending June 28). The segment generated $27.4 billion in revenue, up 13% year over year and an all-time high. Costs tied to services were just $6.7 billion, underscoring why this stream is so valuable: As services scale across a larger base of devices, Apple adds revenue that carries structurally higher margins than hardware. The net effect is a business mix increasingly tilted more toward recurring, cash-rich activity.
Also worth highlighting, Apple's growth is improving. In its fiscal second quarter of 2025, companywide revenue was up 5% year over year; the June quarter's 10% growth marks a significant step up.
Cash generation remains robust, too. Apple's fiscal third-quarter operating cash flow was $29 billion. Additionally, in May, the board authorized an additional $100 billion share repurchase program alongside a dividend that was lifted to $0.26 per share. That combination -- accelerating growth, expanding services, and big sums of cash being returned to shareholders -- is a winning recipe.
Catalysts, risks, and why I like the stock today
Looking ahead, Apple's record installed base is the engine. Each iPhone, iPad, Mac, and Apple Watch creates multiple touchpoints for services like App Store purchases, subscriptions, and payments. As the company rolls out new software and features -- including Apple Intelligence integrations highlighted this summer -- it increases the reasons for users to stick with Apple and to spend more within its ecosystem. Tuesday's event should reinforce that narrative, as the company will likely bring to market the next iPhone family, updated Apple Watch models, and ecosystem enhancements that should fuel engagement.
The stock's valuation isn't a bargain, and that's the pushback you'll hear. However, the mix shift toward services, the durability of Apple's customer loyalty, and consistent capital returns arguably justify a significant premium. Growth stocks often merit higher price-to-earnings multiples when revenue visibility and cash generation are improving.
The business, of course, is not immune to risks. Macro pressure on device upgrades, regulatory scrutiny, and competitive dynamics in key geographies can all weigh on results.
Therefore, with revenue reaccelerating, services setting records, and a product event that can stoke demand and engagement across a massive installed base, Apple is my top stock to buy right now, bar none. If the market gives you volatility around the event or into the holiday quarter, I'd view that as an opportunity to add shares.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
