Apple Inc.
A record iPhone cycle, a new CEO, and a price that already assumes both continue

Research date: 31 October 2026. Company: Apple Inc. (Cupertino, CA). Listing: Nasdaq, AAPL. ISIN: US0378331005. CIK 320193. Reporting currency: USD (US GAAP, fiscal year ends on the last Saturday of September). Latest financial period reviewed: fiscal Q3 2026, quarter ended 27 June 2026 (Form 8-K exhibit 99.1, results released 30 July 2026). Material announcements reviewed through 31 October 2026. Capture window 31 October 2026, 14:30 to 15:10 Europe/Luxembourg.

Tags used throughout: confirmed = company filing, release or primary source; est. = our arithmetic from confirmed inputs; speculated = sell-side, press or third-party estimate. Every figure carries the source's own date; market data carries the capture time as well. This is research, not a recommendation.

Investment memo: our current view

Quality compounder priced above all three fair-value anchors, including the sell-side consensus target. Apple is in its strongest product cycle in years. Fiscal Q3 2026 revenue was USD 109.4B, up 16% (confirmed, 30 Jul 2026), iPhone grew 22% to USD 54.3B and Services grew 12% to USD 30.7B. Over the first nine months of fiscal 2026 revenue is up 16% and Greater China up 30% (confirmed). Gross margin hit 50.1% in Q3, but about 2 points of that came from tariff refunds (confirmed), and management guided the September quarter to 47 to 48% with "significantly greater" supply constraints and rising memory costs (Q3 call, 30 Jul 2026, as reported).

At USD 344.63 (close 30 Oct 2026, Yahoo chart API, captured 31 Oct 15:00) Apple is worth about USD 5.03T, with net cash of only USD 62.2B (est. from the confirmed balance sheet of 27 Jun 2026). That is 39x fiscal 2026 consensus EPS of USD 8.84 and 36x fiscal 2027 (S&P Global consensus via StockAnalysis, 30 Oct 2026, speculated). Our scenario values per share today are USD 149 bust, USD 251 base, USD 366 boom (8% discount, fiscal 2030 exit). The price sits between our base and boom cases: the market pays for above-trend iPhone growth and a premium multiple held for four more years.

The three fair-value anchors disagree: Morningstar USD 285 (wide moat; 3 stars at the July note, current star rating not verified; cut from 290 after the Q3 report, approx. 31 Jul 2026), S&P Global consensus target USD 332.39 (43 analysts, Buy, 30 Oct 2026) and our base case USD 250.6. Their mean is USD 289.33, so average fair value sits 16.0% below the price (equivalently the price is 19.1% above it, est.; meter red).

Leadership changed on 1 September 2026: John Ternus (hardware engineering, at Apple since 2001) became CEO and Tim Cook became executive chairman (announced 20 Apr 2026). The fiscal Q4 report on 2 November 2026 is the first under Ternus and the next hard test.

Thesis underwriting

Listing and timestamps

What the business actually sells

Five product lines and a services layer on top of them. Nine-month fiscal 2026 net sales (confirmed, 8-K 30 Jul 2026; growth and shares est.):

Profit is concentrated in services: 9M FY26 services gross profit was USD 70.0B on USD 91.7B of sales (76.3% margin), against USD 108.8B on USD 272.6B for products (39.9%). Services are a quarter of sales but 39% of gross profit (est. from confirmed lines).

By geography (9M FY26, confirmed): Americas USD 149.4B (+11%), Europe USD 95.6B (+16%), Greater China USD 64.8B (+30%), Japan USD 24.4B (+10%), Rest of Asia Pacific USD 30.2B (+19%).

Where the iPhone sits: from the user's wallet to Apple's profit

Cutaway, outermost to innermost: the active-device base (Apple last disclosed over 2.35B active devices in January 2025, confirmed; later figure not checked) contains the iPhone (about USD 900 to 1,000 average selling price, speculated, Apple stopped reporting units in 2018), which contains Apple silicon and memory (memory is the cost line management flagged, confirmed qualitatively), with the services toll on top (App Store commission 15 to 30%, confirmed policy; Google's default-search payments, reportedly about USD 20B a year, speculated from trial testimony and press).

Money ladder on trailing twelve months to 27 June 2026 (est.: 9M FY26 confirmed plus Q4 FY25 derived as FY25 10-K minus 9M FY25):

The Google default-search payment alone is roughly 15% of Apple's TTM net income if it drops straight to profit (est., speculated input), which is why the DOJ cross-appeal is a valuation item, not a footnote.

The financial starting point

Balance sheet, 27 June 2026 (confirmed): cash USD 39.5B, current securities USD 22.9B, non-current securities USD 84.1B (total USD 146.5B); term debt USD 82.3B and commercial paper USD 2.0B (total USD 84.3B). Net cash USD 62.2B (est.). Quarterly dividend USD 0.27 (confirmed).

Guidance for the September quarter (Q3 call 30 Jul 2026, as reported): revenue +9 to 11% (USD 111.7 to 113.7B on the USD 102.5B base), iPhone up mid-teens, gross margin 47 to 48% including about 1 point of tariff refunds.

Competitors and share (31 October 2026)

Share: third-party trackers (IDC, Counterpoint, Canalys) place Apple at roughly a fifth of global smartphone units and over half of industry smartphone profit (speculated, not re-verified on 31 Oct 2026). For Apple the TAM anchor that matters is the installed base rather than units: services revenue per active device is what compounds. Two anchors for that base: 2.35B active devices (confirmed, Jan 2025) gives about USD 50 of services per device per year on 9M FY26 annualised services of USD 122B (est.); a narrower anchor of ~1.4B active iPhones (speculated) gives about USD 87.

Scenarios: fiscal 2030 under bust, base and boom (31 October 2026)

Starting point: fiscal 2026 consensus revenue USD 477.6B and EPS USD 8.84 (S&P Global via StockAnalysis, 30 Oct 2026, speculated). Our Q4-implied FY26 revenue is 364.4 + 112.7 (guide midpoint) = USD 477.1B (est.), in line. The share count falls 2.5% a year to 13.18B in all cases (est.; the last year's pace was 1.6%).

Value today = FY30 price / 1.08^3.9, plus about USD 3.7 for the present value of four years of dividends (est.). Bust is a post-supercycle iPhone decline plus the loss of Google search payments (about 3 points of net margin). Base keeps services at low double digits and iPhone near flat after FY27. Boom needs a second upgrade wave (foldable iPhone, on-device AI) and today's multiple held; its single driver is iPhone units per year. Consensus FY27 revenue of USD 524.8B (+9.9%) sits on the boom path for the first year. The capacity ceiling is supply: memory and advanced-node allocation, which management named as constraints.

Valuation: market data and scenario values as of 31 October 2026

Peers (speculated, approximate, not re-verified): Microsoft and Alphabet trade on lower forward P/Es than Apple while growing earnings faster; Samsung trades far lower. Apple's premium rests on capital return and the services annuity.

Dilution history: none. Apple shrinks: diluted shares fell from 14,948M to 14,715M in a year (confirmed); stock-based compensation is more than offset by buybacks.

Scenario values per share and fair-value anchors

Leadership and governance (31 October 2026)

Who runs it

• John Ternus, CEO since 1 September 2026 (announced 20 Apr 2026, confirmed via press of the Apple release). Hired, not founder; joined Apple in 2001, SVP Hardware Engineering from 2021, led iPhone, iPad, Mac and AirPods hardware generations. Joined the board on 1 September 2026.
• Tim Cook, executive chairman (CEO August 2011 to 31 August 2026). A planned succession approved unanimously by the board; the predecessor was not pushed out.
• Arthur Levinson moved from non-executive chairman to lead independent director on 1 September 2026.
• Kevan Parekh, CFO since January 2025 (succeeded Luca Maestri).

Promises versus delivery, last four reports

Revenue quality

No NRE split applies. The quality tests for Apple: (1) services share of gross profit, 39% in 9M FY26 (est.); (2) one-off gross margin, about 2 points of tariff refunds in Q3 (confirmed); (3) concentration: none among end customers, but one partner, Google, pays an estimated USD 20B a year that sits almost entirely in profit (speculated); (4) geography: Greater China is 17.8% of 9M sales and grew fastest (est.), and it is also the most political.

Insider register (press reports of Form 4 filings, captured 31 Oct 14:55)

Pattern: routine post-vesting sales under trading plans, no open-market buys; insiders own 0.06% (StockAnalysis, 31 Oct). Cook keeps about 3.24M shares through his trust (press, speculated).

Red flags

• No restatements, no auditor change (Ernst & Young), no late filings found.
• Legal: the US v. Google cross-appeal (filed Feb 2026) could end search payments; DOJ v. Apple monopolisation case pending; EU Digital Markets Act enforcement continuing (status not re-verified).
• Q3 gross margin includes tariff refunds that will not repeat.
• Net cash keeps shrinking as buybacks exceed free cash flow.

Next dated hard test

Fiscal Q4 2026 results, Monday 2 November 2026, after the close (call 14:00 PT). Pass marks: revenue within USD 111.7 to 113.7B, iPhone up mid-teens, gross margin 47 to 48%, December-quarter guidance that holds high-single-digit growth despite memory costs, and the first commentary from Ternus as CEO.

IBKR ratings

Fair value update (31 Oct 2026, after this capture): the average shown on the price chart is now USD 289.34, 16% below the 2026-10-30 close of 344.63 (red). Inputs: Morningstar fair value via IBKR Mobile (Analyst Equity Report; 2 stars, moat Wide, uncertainty Medium) 290.0 (2026-09-09); LSEG (Refinitiv) consensus target, 43 analysts, via IBKR Mobile 327.42 (2026-10-31); The Claude Trader base case 250.6 (2026-10-31). Where an earlier section quotes a different average, this one is current.

Captured 2026-10-31 15:25 to 15:27 Europe/Luxembourg from IBKR Mobile (read-only). Full table with screenshots: ibkr/ibkr_aapl_2026-10-31.md.

Latest IBKR news: - 31 Oct 2026 Seeking Alpha: notable tech headlines for the week, Intel, Microsoft, Sandisk - 31 Oct 2026 Barron's via Dow Jones: Alphabet stock got hammered, not selling - 31 Oct 2026 IBD via Dow Jones: Dow futures, stock market sells off as Apple, Palantir, midterm elections loom - 31 Oct 2026 Motley Fool: Down 33.3% this year, is Netflix the best value stock (general feed)

Fact-audit notes

Adversarial audit, 31 Oct 2026 (separate auditor, captured 31 Oct 2026 16:00 Europe/Luxembourg)

All Q3 FY26 and 9M figures (segments, geography, gross profit split, operating and net income, EPS, diluted shares, balance sheet, cash flow, dividend, ~2 pt tariff refund) re-read in the 8-K exhibit 99.1 of 30 Jul 2026: confirmed. Consensus (332.39, median 337.50, 245 to 405, 43 analysts; FY26 revenue 477.64B, EPS 8.84; FY27 revenue 524.75B, EPS 9.55) re-read on StockAnalysis, as of 30 Oct 2026: confirmed. Yahoo meta 52-week range and 30 Oct close: confirmed. Scenario arithmetic, market cap, EV, multiples and FAIR_VALUE average recomputed: correct. Q4 FY25 TTM inputs (102.5B sales, 27.5B net income) match the FY25 10-K figures as reported by press; other Q4 FY25 lines reasonable, not re-read.

What is still open

• Exact Morningstar note date for USD 285 and any October update.
• Primary Form 4 read for the October insider sales.
• Current active-device count and any Google payment disclosure.
• LSEG and TipRanks consensus from the IBKR capture, to replace the S&P Global consensus in the average.

Information dates and future updates

Every section is dated 31 October 2026. Review after the 2 November 2026 report: update the financial starting point, guidance, the scenario base year and FAIR_VALUE.json.