Is It Time to Take a Bite Out of Apple's Stock as Revenue Growth Accelerates?

While Apple (NASDAQ: AAPL) saw its fiscal first-quarter revenue soar, the stock barely budged after the company reported its results. The stock is up less than 10% over the past year and down about 5% on the year, as of this writing.

With iPhone sales suddenly accelerating, is now a good time to buy the stock?

iPhone momentum continues

After a couple of years of sluggish sales, Apple's recent iPhone momentum continued in its fiscal Q1, with the company posting its strongest revenue growth since shortly after the pandemic in 2021.

The iPhone is Apple's biggest source of revenue, making up nearly 60% of its sales in the quarter. Sales soared for the smartphone in fiscal Q1 2026, climbing 23% to $85.27 billion and coming in well ahead of analyst expectations for $78.65 billion in iPhone revenue, as compiled by LSEG. CEO Tim Cook called demand for the iPhone "staggering."

Sales of Apple's other products were mixed. iPad sales rose 6% to $8.6 billion, with half of its customers new to the product. However, Mac sales fell 7% year over year to $8.4 billion, while wearable revenue slipped 2% to $11.5 billion.

Total product segment sales increased by 16% to $113.7 billion. China was an area of strength, with revenue climbing 38%. Apple's services segment -- which consists of its App Store, iCloud storage, Google Search revenue sharing, Apple Pay, Apple TV, and more -- meanwhile, saw revenue jump by 14% to $30 billion.

Product gross margin rose by 450 basis points sequentially to 40.7%, while service margin increased by 120 basis points sequentially to 76.5%. Overall gross margin was 48.2%. Despite rising memory prices, Apple expects to keep gross margin in line in Q2, with it projected to be between 48% and 49%.

Overall, Apple's revenue climbed by 16% to $143.76 billion, while its earnings per share (EPS) jumped 19% to $2.84. That topped the analyst consensus estimates for EPS of $2.67 on sales of $138.48 billion.

For fiscal Q2 2026, Apple expects its revenue to grow by 13% to 16% year over year, with services revenue rising at a comparable level to fiscal Q1.

Image source: Getty Images.

Is it time to buy Apple stock?

Apple has remedied its biggest areas of weakness -- sluggish iPhone sales and a weak China -- and it is seeing some of its best growth in several years. However, the stock has not moved much on this improvement.

This can largely be attributed to its valuation. The stock climbed through a period of pretty lackluster results, pushing up its valuation multiple. Today, it trades at a forward price-to-earnings (P/E) ratio of around 31 based on analysts' estimates for fiscal 2026 (which will end in September) and 28 times fiscal 2027 estimates. That's more expensive than many of the "Magnificent Seven" stocks.

As such, the stock looks appropriately priced at this point. This could limit some of its upside, despite its strong operational momentum.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends London Stock Exchange Group Plc. The Motley Fool has a disclosure policy.