I spent the last few weeks diving deep into Apple and walked away with more questions than answers. Everyone knows Apple is one of the highest-quality companies in the world. The brand strength is second to none, the cash flows are pristine, and the capital return program is immaculate. But the valuation just doesn’t make sense to me anymore. At over $3 trillion and a P/E of 31, I’m struggling to justify why I’d want to be long at these levels.

I broke the company down across six core dimensions: valuation, product innovation, services, competitive positioning, capital allocation, and strategic vision. What stood out most was the lack of future investment and positioning. Apple is still refining its ecosystem, but it no longer feels like it’s expanding it. It’s been nearly a decade since a true breakout product. Vision Pro is impressive on a hardware level, but it hasn’t found real traction and is completely too expensive for mass market adoption. The iPhone remains dominant, but dependency on a single product this far in feels fragile.

Services are a bright spot in terms of margin contribution, but even there, I see structural risks. The Google Search deal alone makes up a huge share of services revenue and could be threatened by regulatory changes. Meanwhile, platform control over things like the App Store is under pressure in Europe and increasingly in the U.S. There’s also a saturation problem. Apple has over 2 billion active devices. Future growth comes mostly from squeezing more out of existing users, not expanding the base. Something I personally have grown tired of as an Iphone user.

From a competitive standpoint, Apple feels like it's falling behind. Microsoft owns the AI stack from chip to cloud to productivity. Google is pushing vertically with Gemini and TPUs (not to mention Waymo, Quantum, etc). Meta is all-in on open source and model training. Apple, in contrast, is integrating other people's models while staying out of infrastructure entirely. That may be fine in the short term, but over time, it limits value capture. If you don’t own the tech, you’re stuck renting it at best.

On capital allocation, Apple has been masterful. The buyback has driven EPS growth far beyond what revenue growth would suggest. But buybacks only create durable value when the stock is undervalued. At 31x earnings, that’s a tough argument to make. Dividends are modest and consistent, but nothing to base a long-term position on.

What really sealed my concern was modeling out different return scenarios. I included dividend yield in every case. In the bull case, assuming 8% EPS CAGR and a 30x multiple, I end up with around a 7.5% total return per year. Not bad, but hardly compelling when compared to alternatives. In the base case, where EPS grows 5% and the P/E compresses to 25, returns fall to around 1.6% annually. And in the re-rating case, EPS growth at 2% and a 15x multiple, total return becomes deeply negative. A 50% drawdown is not unthinkable if the narrative ever shifts from “tech growth compounder” to “incredible consumer staple with high market share.”

To be clear, I’m not calling for Apple to collapse. The business and brand are rock solid. But the stock is priced for a future I’m not sure is coming. It reminds me of Coca-Cola in the late 1990s. A world-class brand, dominant in its category, but trading at growth multiples long after the real growth had slowed. Those who held from 1998 waited over a decade just to break even in real terms.

I don’t think Apple is a short. But I can’t make a strong case for going long from here either. The risk-reward is skewed. Upside is limited even if things go well. Downside becomes real if the market ever reprices the stock based on forward returns instead of past excellence.

I do think that Apple will remain inflated due to its easy inclusion in so many different funds, but this too can't hold up the PE forever. IMO Apple does not deserve an equal or higher PE than MSFT, GOOG, META, and AMZN and it's not particularly close.

As a longtime Apple customer, I deeply understand its value proposition. However, management is facing a declining moat from the disruptive growth of artificial intelligence in the hardware space, which poses a price-return risk. Management would be wise at this point to focus less on stock buybacks and more on effectively investing cash flow into more aggressive M&A and better R&D talent. I predict Apple stock will return 10% annually over the next 12 months. I also predict Apple will return 10% annually over the next 10 years as well.

AAPL has been relatively weak so far in 2025. As of June 17, shares were trading at $195.64, down $2.83 intraday (-1.43%) Cumulatively, the year-to-date decline is about 20%, making it one of the worst-performing tech giants in MAG7

In the last month, the stock price has oscillated between $196 and $202 since the end of May, and is still below the key 50-day SMA of $205.69 and the 200-day SMA of $225.74, indicating that medium- to long-term downward pressure still exists.From a fundamental standpoint, Apple achieved revenue of $95.4 billion in the second quarter of fiscal 2025, up 5% year-over-year Diluted earnings per share of $1.65, up 8% year-over-year, both of which exceeded Wall Street's expectations

The stock price is currently in the vicinity of 193 U.S. dollars has important support, if broken may further test the 180 U.S. dollars line, and above the key resistance in the 214-216 U.S. dollars range, once recovered will be expected to regain the momentum of the rebound if the AAPL fell to 193-190 U.S. dollars range,

can be considered to take a small position in the low batch of buying, using the average support area for short-term rebound arbitrage. If AAPL falls to $193-190, you can consider taking small positions to buy in low batches and take advantage of the SMA support area for short-term rebound arbitrage. If the price can recover $205-206 and stabilize above it, it can open up space for a larger rally.