Apple Inc. (AAPL): A Bull Case Theory 

We came across a bullish thesis on Apple Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on AAPL. Apple Inc.’s share was trading at $283.10 as of December 1st. AAPL’s trailing and forward P/E were 37.95 and 34.13 respectively according to Yahoo Finance.

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Apple delivered a strong fiscal third quarter, posting revenue of $102.5 billion, up 7.9% year over year and 9% sequentially, surpassing expectations. EPS rose to $1.85, up 3.9% versus estimates, as gross margin expanded to 47.2% and operating margin reached 31.6%. Net income was $27.5 billion, with free cash flow at a record $29.7 billion and a 25.8% margin. Services remained the key growth driver, generating an all-time high of $28.8 billion in revenue, up 15% year over year, with recurring strength in App Store, advertising, cloud, and payments.

Apple Pay expanded to nearly 90 markets with double-digit user growth, reinforcing the company’s shift toward high-margin, predictable cash flows. iPhone revenue climbed 6% to $49 billion, led by strong demand for the iPhone 17 lineup and record upgrader activity across India, Latin America, and the Middle East, though supply constraints limited availability in China. Mac revenue rose 13% to $8.7 billion, fueled by new M5-powered devices, while iPad sales were flat at $7 billion. Wearables and Accessories were stable at $9 billion, as Watch Ultra 3 and AirPods Pro 3 drove engagement despite market saturation.

Apple maintained a robust balance sheet with $132 billion in cash, $99 billion in debt, and $34 billion net cash, returning $24 billion to shareholders through buybacks and dividends. Capital spending increased to support AI infrastructure and Private Cloud Compute expansion. Looking ahead, management guided for 10–12% revenue growth in the December quarter, double-digit iPhone gains, and sustained mid-teens Services growth, positioning Apple for a record holiday season and durable FY26 momentum.

Previously we covered a bullish thesis on Apple Inc. (AAPL) by Kontra in October 2024, highlighting its sticky ecosystem, margin expansion from Services, and robust shareholder returns. The stock has appreciated about 20.46% since our coverage as these drivers materialized. The thesis remains valid given Apple’s durable growth. Sergey shares a similar view but focuses on financial strength and AI-driven expansion.

Apple Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 156 hedge fund portfolios held AAPL at the end of the second quarter which was 159 in the previous quarter. While we acknowledge the risk and potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.