Apple's (AAPL) Strong Fundamentals Already Priced In, Analysts Say

Apple Inc. (NASDAQ:AAPL) is one of the AI Stocks Making Waves on Wall Street. On January 2, Raymond James analyst Srini Pajjuri resumed coverage on the stock with a Market Perform rating and no price target. The rating marks a step down from the Outperform rating that the stock held prior to coverage suspension.

The firm remains neutral on the stock, noting Apple’s strong fundamentals already reflects in the stock price.

“We are resuming coverage of Apple with a Market Perform rating. Despite strong fundamentals and improving product cycles, we believe Apple’s current valuation appropriately reflects these strengths, limiting near-term upside.”

Firm analysts acknowledged how Apple flaunts leadership in consumer hardware, ecosystem, and services, with a “highly sticky value proposition.” However, they believe that much of this value is already understood by investors.

Moreover, the tech giant’s installed base, now standing at an estimated 2.4 billion, will make incremental gains from tech upgrade cycles harder to attain.

“The relative success of the iPhone 17 refresh cycle has likely driven much of the recent share gains, and while we don’t discount the value generated by this growth (likely exceeding $217 billion in CY25), with a valuation several turns above the 5-year average P/E, we remain on the sidelines at this time.”

Analysts also noted how services are an important revenue contributor, but that Apple’s overall performance remains closely tied to hardware sales, especially the iPhone. Meanwhile, near-term catalyst don’t seem robust enough to drive outperformance in their coverage universe.

Overall, Apple’s current valuation is an appropriate estimation of its business profile, noted the analysts.

Apple is a technology company known for its consumer electronics, software, and services.

While we acknowledge the potential of AAPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 AI Stocks Investors Are Watching and 10 Best AI Stocks to Buy Under $50

Disclosure: None.