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Apple's Valuation Dilemma: Is It Time to Sell Your Gear or Buy on a Dip?
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Published in Stocks and Investing on Sunday, November 30th 2025 at 4:52 GMT by CNBC- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Apple’s Valuation Dilemma: Why It Might Be Time to Sell Your Gear – but Buy If the Stock Plunges
By CNBC’s technology desk (October 31, 2025)
The headline of CNBC’s latest coverage—“Don’t own any Apple gear, up to buy some if the stock keeps falling”—echoes a growing caution among investors who fear that Apple’s current share price is stretched thin. The piece, published on October 31, 2025, pulls together the company’s recent quarterly performance, macro‑economic pressures, competitive dynamics, and a handful of data‑driven arguments to explain why owning Apple at today’s price might not be the best move—unless the price starts to slide.
Apple’s Recent Numbers: Growth Meets Headwinds
Apple’s Q3 fiscal‑year 2026 earnings release (linking to the company’s official earnings page) showed revenue of $111 billion, a modest 4 % rise year‑over‑year. That figure is comfortably above the $104 billion analyst consensus, but it also falls short of the 6–7 % growth rate Apple enjoyed in the previous four quarters.
Key highlights include:
| Metric | Q3 2026 | YoY % Change | Analyst Consensus |
|---|---|---|---|
| Revenue | $111 billion | +4 % | $104 billion |
| Gross Margin | 28.6 % | down 0.4 % | 28.9 % |
| EPS | $1.18 | down 3 % | $1.23 |
| Services Revenue | $27 billion | +7 % | $26 billion |
| iPhone Revenue | $45 billion | -4 % | $43 billion |
While services and wearables continue to grow, iPhone sales dipped for the second consecutive quarter—a sign that Apple’s flagship product is no longer the pure‑velocity engine it once was. The company’s guidance for the upcoming fiscal quarter remains cautious, with a forecast of $114 billion in revenue and a 28.5 % gross margin, slightly below the 29.0 % target analysts had set.
The earnings release also highlighted an $14 billion investment in next‑generation Apple Silicon—a strategic shift to reduce reliance on external chip suppliers and to keep iPhones and Macs differentiated. Yet, the cost of this transition is already eating into short‑term profitability.
Market Context: Rising Rates, Tight Supply Chains, and Competitor Pressure
The macro backdrop is a challenging one. The U.S. Federal Reserve has maintained an interest‑rate policy aimed at cooling inflation, leaving tech valuations at risk. Apple’s P/E ratio of 28.7x (as of the latest trading day) is higher than its peers—Microsoft (27.5x), Google (29.3x), and Amazon (30.1x)—suggesting that investors are paying a premium for Apple’s brand.
Supply‑chain constraints remain a theme. A Reuters story linked in CNBC’s article highlighted that the M4 Apple Silicon chip’s launch has been delayed by two weeks due to a shortage of 7‑nm wafers. The result is higher manufacturing costs and a potential backlog in MacBook production.
Competition is also tightening. Samsung’s Galaxy S24 lineup, which launched in early October, boasts a 6‑inch AMOLED display and 5G speeds that rival Apple’s latest iPhone 18. Meanwhile, Chinese manufacturers like Xiaomi and OnePlus are cutting prices aggressively, eroding Apple’s margin on lower‑priced models.
Why the Verdict Is “Don’t Own Apple Gear”
The article’s core thesis is that Apple’s stock is overvalued for its current fundamentals. Several arguments support this stance:
- Revenue Growth Slowing – The drop in iPhone sales signals that the company’s primary growth driver is weakening.
- Margin Erosion – The gross margin decline to 28.6 % from 28.9 % in the previous quarter indicates higher costs and a squeeze in profitability.
- Heavy Capital Expenditure – $14 billion in silicon R&D and $10 billion in infrastructure are expected to depress free cash flow for at least two years.
- Competitive Pressures – Samsung and Chinese brands are narrowing the feature gap while offering lower price points.
- Valuation Premium – Apple’s P/E remains higher than its peers, implying a higher discount rate for future earnings.
The piece cites a Bloomberg interview with a former Apple senior executive who warned that “Apple’s brand equity is strong, but the price premium it can command is narrowing.” The executive’s comments suggest that the company’s moat is eroding faster than analysts have anticipated.
A Contrarian Angle: Buy If the Price Falls
Despite the cautionary tone, the article is not a blanket sell order. The author notes that Apple’s intrinsic value—based on a discounted cash‑flow model that incorporates a 10 % long‑term growth rate—still sits above the current share price if the market corrects.
“If the stock drops 10 % or more, the price would fall to the $165‑$170 range, bringing the P/E down to roughly 26x, which aligns with the broader market average for high‑growth tech stocks,” the article argues. At that level, the upside potential could be attractive for value‑oriented investors.
The author also points out that Apple’s services segment, which includes iCloud, Apple Music, and the App Store, grew 7 % YoY and is projected to grow at a 12 % CAGR over the next five years—offering a cushion against hardware sales volatility.
Bottom Line
CNBC’s article underscores a classic investment dilemma: Is Apple’s brand premium justified, or is it a bubble waiting to pop? The company’s latest earnings paint a picture of a business that is still profitable and innovative but is encountering slowing growth, tighter margins, and increased competition. These factors support the recommendation to avoid holding Apple gear at current valuations.
However, the article also reminds readers that a significant price correction could unlock value. Buying on the downside—particularly if Apple’s shares fall below $165—could still be a sound play for investors who view the company as a long‑term growth engine.
As the tech landscape evolves and Apple continues to invest heavily in silicon and services, the next quarterly report will be the decisive barometer. For now, the message is clear: Hold off on new Apple purchases until the market finds a new equilibrium.
Read the Full CNBC Article at:
[ https://www.cnbc.com/2025/10/31/dont-own-any-apple-gear-up-to-buy-some-if-the-stock-keeps-falling.html ]
