This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Key Points
- Apple’s revenue gains have slowed over the past several quarters, as it’s becoming more difficult for the company to achieve meaningful growth.
- The tech giant has lagged its peers in AI innovation.
- Though the stock has not risen much in 2025, it still trades at a rich valuation.
Considering that it's such a dominant and innovative tech business, it's a bit surprising that Apple (NASDAQ: AAPL) so far hasn't been much of a leader in the artificial intelligence (AI) race. That is reflected in the share price, which has risen by just 3% so far in 2025. Investors desperately want some positive news from the management team.
We won't have to wait long for a fresh update. Apple is set to report results for its fiscal 2025 fourth quarter (which ended Sept. 27) on Oct. 30. Should you buy this "Magnificent Seven" stock before then?
Apple shares still look expensive
At a price-to-earnings ratio of 38.9, Apple shares trade at a rich valuation. This stock doesn't seem like a smart buy today, especially given the company's lack of progress in AI. It also doesn't help that Apple's growth has decelerated over the past three years.
If Apple were to report results and guidance that came in well ahead of Wall Street analysts' estimates, then there's a high likelihood shares would jump in response. However, it's anyone's guess whether this will happen. Correctly forecasting both a company's numbers and the market's reaction to them is an impossible task to perform consistently.
Investors who are considering buying Apple should not feel urgency to get in before Oct. 30. Instead, any decision about a stock purchase should be made based on at least a five-year time horizon for holding the shares.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
