Apple has been the one stock that has not been severely hit by the marketwide sell-off over the past month, but its valuation is looking harder to defend. The iPhone maker trades at 31 times forward earnings, well above the S&P 500’s 20.3 times and also richer than Nvidia at 22 times.
That gap matters because Nvidia is now priced at nearly 50% less than Apple on forward earnings even as Wall Street analysts project growth of 79% and 85% over the next two quarters. Microsoft, another long-time valuation peer of Apple, just reported 17% revenue growth and remains a leader in the AI realm, with Azure a popular platform for running AI workloads.
Apple’s latest quarter was its best in years, but the broader picture is still one of relatively stagnant growth over the past few years. That is the tension in the stock now: it has held up better than the market, yet it remains expensive beside companies that are growing much faster. The article says there are three companies with lower valuations than Apple that are growing at a far faster rate, and Apple is one of them only in the sense that its own multiple is no longer easy to justify on growth alone.
Taiwan Semiconductor Manufacturing, one of Apple’s key suppliers, also underscores how central chip production has become to the company’s business. Taiwan Semiconductor makes most of the chips for Apple’s products, according to the visible text, which ties Apple’s fortunes to a supply chain that has to keep delivering even as investors rotate toward cheaper growth names. For now, the market has treated Apple as a relative safe haven in a rough month, but the stock’s premium looks harder to excuse when Nvidia and Microsoft are growing faster and trading at lower multiples.