Tsai Capital: Apple (AAPL) Remains one of the Highest-Quality Businesses on the Planet

Tsai Capital Corporation, an investment management firm, released its fourth quarter 2025 investor letter. A copy of the letter can be downloaded here. Tsai Capital Growth Equity Strategy gained 8.5% before fees and 7.6% after fees for the year ended December 31, 2025, compared to the S&P 500 Index’s 17.9% return. Tsai Capital Growth Equity Strategy has gained 970% cumulatively before fees and 658% after fees, since its inception 26 years ago, compared to the S&P 500 Index’s total return of 639%. The strategy’s objective is to invest long-term in exceptional companies that can quickly and effectively allocate capital towards the most promising ideas and talent. Currently, the portfolio is invested in 17 high-quality growth companies across sectors. In addition, you can check the top five holdings of the Strategy to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Tsai Capital Corporation highlighted stocks such as Apple Inc. (NASDAQ:AAPL). Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was -5.70%, and its shares gained 7.93% of their value over the last 52 weeks. On January 28, 2026, Apple Inc. (NASDAQ:AAPL) stock closed at $256.44 per share, with a market capitalization of $3.77 trillion.

Tsai Capital Corporation stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2025 investor letter:

"Apple Inc. (NASDAQ:AAPL) —Year of First Purchase: 2016) We initiated our Apple investment in 2016 and elevated it to a core holding in 2018, the same year the company unveiled its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s far-sighted leadership, Apple has continually redefined innovation across hardware and software.

Today, Apple’s ecosystem powers about 2.4 billion active devices, bolstered by a rapidly expanding subscription services base. This approach has supercharged customer engagement and spending. In fiscal 2025 (ended September), the high-margin, stable subscription services segment accounted for roughly 42% of total gross profits, up from about 39% the previous year.

The September 2025 iPhone 17 launch—featuring the iPhone 17, iPhone 17 Pro, iPhone 17 Pro Max, and the new ultra-thin iPhone Air (replacing the Plus)—has posted one of the strongest early sales cycles in recent years. Key drivers include the A19 chip, larger displays, and 120Hz refresh rates across all models.

We expect rising revenues from new product launches, services, margin expansion, and share repurchases to fuel approximately 10% annual growth in earnings per share over the next several years. A decade after we first purchased shares, we believe Apple remains one of the highest-quality businesses on the planet."

Apple Inc. (NASDAQ:AAPL) is in 8th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 166 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the third quarter, which was 156 in the previous quarter. Apple Inc. (NASDAQ:AAPL) reported revenue of $102.5 billion in the September quarter, reflecting an 8% year-over-year increase. While we acknowledge the potential of Apple Inc. (NASDAQ: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.

In another article, we covered Apple Inc. (NASDAQ:AAPL) and shared the list of AI stocks in focus on Wall Street. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.