Apple (AAPL) 'Soars' 45% with Less AI Investment... "It's Not Just About Nvidia (NVDA)"

▲ Apple (AAPL)/AI-generated image

Apple (Apple, AAPL) is gaining attention as a next-generation AI investment alternative to Nvidia (Nvidia, NVDA).

According to 24/7 Wall Street on September 14 (local time), Apple's stock has risen by 22.56% year-to-date, with a 44.98% increase over the past year. 24/7 Wall Street issued a buy rating for Apple. The 12-month target price is $364.19. The potential upside is 9.61%, and the forecast confidence is 90%.

Performance is at the core of the investment thesis. Apple's Q3 2026 fiscal year revenue increased by 16.4% year-over-year to $109.42 billion. iPhone revenue was $54.25 billion, and services revenue hit a record high of $30.74 billion. Earnings per share (EPS) were $2.02, exceeding market expectations by 6.8%. This marks nine consecutive quarters of exceeding market forecasts.

The core of Apple's AI strategy is its 2.5 billion active devices. Apple CEO Tim Cook stated that there is “enormous excitement” about Siri AI. He also mentioned the possibility of additional paid services for iCloud+. Mac revenue increased by 29%, driven by enterprise demand for on-device AI processing. 24/7 Wall Street's bullish scenario target price is $380.80.

On the other hand, high memory prices are a concern. The Q3 gross margin of 50.1% included a 2 percentage point one-time tariff refund benefit. Cook stated, “We expect to pay higher memory costs in September.” Regulatory issues in the European Union and China are also impacting the global launch schedule for Siri AI. Furthermore, the EPS forecast for fiscal year 2027 has been downgraded 24 times in the past 30 days. 24/7 Wall Street's bearish scenario target price is $316.06.

Apple's price-to-earnings (P/E) ratio is 43x, higher than Microsoft (Microsoft, MSFT) at 28x and Alphabet (Alphabet, GOOGL) at 15x. However, Apple's return on equity (ROE) is 171.4%, and its operating profit margin is 32%. 24/7 Wall Street cited capital efficiency, the ability to leverage 2.5 billion devices and its services business without massive AI data center investments, as a key competitive advantage.

[Article Key Summary]

-24/7 Wall Street issued a buy rating for Apple with a target price of $364.19, assessing a potential upside of 9.61%.

-Apple recorded $109.42 billion in revenue for Q3 fiscal year 2026, surpassing market expectations for nine consecutive quarters.

-Monetizing Siri AI through 2.5 billion active devices is a strength, but high memory costs and regulatory delays are key risks.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*