Is Apple Stock a Buy During the Holiday Quarter?
2026-10-14 08:15
•Will Healy •The Motley Fool
••••• ••••••• Axe Cap view
Apple’s Holiday Quarter: Too Rich for Our Blood
Apple’s growth is slowing and its high valuation leaves little room for error, making it unappealing for buyers now.
Apple’s reported 16% sales growth sounds good until you factor in expectations for slower growth—just 8% this quarter and 11% next year. That’s already baked into its high price-to-earnings ratio of 39, which is steep compared to Alphabet’s 29. The concern? Apple is late to the AI party, relying on Google’s Gemini rather than forging its own path. Given the new CEO, John Ternus, uncertainty adds another layer of risk. In South African terms, this translates into less foreign tech earnings coming through via Prosus or Naspers, which we watch closely. The rand’s fate often hinges on tech investor sentiment—USD/ZAR could stay volatile if the wider tech sector wobbles. This view could be wrong if Apple unveils a compelling AI breakthrough or the upgrade cycle acceleration exceeds expectations, but for now, Apple shares look pricey with limited upside. this is just our opinion and not financial advice
Avoid buying Apple shares at these levels. Instead, consider watching Prosus and Naspers for signals on global tech trends and hold USD/ZAR carefully as a hedge against tech sector shocks.
- AAPL
- NPN
- PRX
- USD/ZAR
- Apple surprises with strong AI innovation
- Stronger-than-expected iPhone upgrade demand
6/10
Apple faces uncertainty under new CEO John Ternus as it enters the holiday quarter. While recent sales growth of 16% and an upgrade cycle provide optimism, analysts expect growth to slow to 8% this quarter and 11% next year. The main concern is Apple's high 39 P/E ratio relative to growth prospects and competitors like Alphabet (29 P/E). Additionally, Apple has lagged in AI development, relying on Google's Gemini. The article recommends investors avoid buying Apple at current levels without a substantial discount or meaningful technical improvements.
Our take is based on reporting first published by The Motley Fool.
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