Apple trades at 39.5 times earnings as of October 2026, making it the most expensive stock among a peer group that includes Microsoft, Alphabet, and Dell Technologies. Despite commanding this premium valuation, Apple grew its revenue more slowly than four of those five peers over the comparable four fiscal quarters.
Apple Commands Alphabet Margins at Over Twice the Price
Apple posted a 33.2 percent operating margin over its latest four fiscal quarters ending in June 2026, sitting right alongside Alphabet at 33.1 percent. Yet Alphabet grew its revenue by 20.1 percent over its own four fiscal quarters, comfortably outpacing Apple’s 14.2 percent growth rate. Alphabet stock trades at a much lower multiple of 15.9 times earnings.
Alphabet operates an interactive media business rather than manufacturing physical hardware. It matches Apple’s operating profitability while beating its top-line expansion for less than half the price. Buyers paying Apple’s multiple are effectively betting that demand for the iPhone and Mac will continue accelerating, and that the company can protect its margins as component expenses climb.
Apple does point to a measurable revenue speed-up. Revenue grew by just 0.4 percent in the twelve months ending June 2024, followed by 6.0 percent growth in the twelve months ending June 2025. Growth over the latest twelve months accelerated past those figures, and current share prices assume that momentum will hold.
Hardware Supply Constraints Limit Surging Demand
Demand for the iPhone and Mac is currently holding up against expectations, but Apple cannot build enough devices to keep pace. During the June 2026 quarter, iPhone revenue rose 22 percent year-over-year to $54.3 billion, while Mac revenue jumped 29 percent.
During the July 30, 2026 earnings call, management noted that both product lines were selling far better than initial forecasts. However, short supply of the advanced semiconductor manufacturing processes used to produce Apple’s custom processors held sales back. Management warned that these silicon shortages are expected to worsen.
The company anticipates revenue growth of 9 percent to 11 percent for the September 2026 quarter, slowing down from the 16.4 percent growth recorded in the June quarter. Executives attributed this deceleration to tighter hardware supply constraints across the iPhone, Mac, and iPad lineups, alongside currency fluctuations accounting for roughly two and a half percentage points of lost growth.
| Company | Market Value (USD B) | P/E Multiple | Revenue Growth | Operating Margin |
|---|---|---|---|---|
| Apple (AAPL) | 5,096 | 39.5 | 14.2% | 33.2% |
| Microsoft (MSFT) | 3,895 | 29.1 | 17.8% | 46.8% |
| Alphabet (GOOGL) | 3,891 | 15.9 | 20.1% | 33.1% |
| Amazon (AMZN) | 2,671 | 19.7 | 15.8% | 12.1% |
| Dell Technologies (DELL) | 294 | 25.9 | 49.0% | 9.6% |
| HP Inc. (HPQ) | 30.9 | 12.6 | 8.1% | 6.6% |
Memory Costs Threaten Operating Margins
Apple’s high margins have held firm so far, though a portion of that financial cushion came from tariff refunds. The company’s operating margin over the latest twelve months reached its highest point across the 40 fiscal quarter ends recorded since fiscal Q4 2016. Gross margin touched 50.1 percent in the June quarter, but management confirmed that tariff refunds added about two percentage points to that metric.
Memory chips represent the next major cost pressure. Management expects Apple to pay significantly higher prices for memory components during the September quarter, with pricing trends projected to keep climbing afterward. Apple has reluctantly raised some of its own retail device prices to offset these pressures.
Management guided gross margins down to a range of 47 percent to 48 percent for the September quarter, a projection that includes only about one percentage point of lift from tariff refunds. Trefis reported these financial metrics, highlighting how Apple’s current P/E multiple sits higher than at 36 of the 40 fiscal quarter ends since late 2016.
If hardware demand or profitability falters, investors would own the technology sector’s most expensive stock without matching Alphabet’s top-line growth or Microsoft’s 46.8 percent operating margin. Apple’s actual gross margin results for the September quarter will provide the definitive test when the company reports earnings in November 2026.
