September brought better App Store news for Apple Inc. (NASDAQ:AAPL). UBS says revenue grew 5% year over year, compared with no growth in August. However, analyst David Vogt, who rates Apple Neutral and has a $296 price target, says it is too early to draw broader conclusions. That leaves investors to decide whether one month of stronger growth can justify the stock’s premium. Apple’s recent performance is encouraging, but you’ll want to see how it compares with the stocks that have delivered the strongest long-term returns.
September Was the Easy Part
For the full quarter, App Store revenue increased about 2%. It marked the second consecutive quarter of low-single-digit growth despite easier comparisons. Growth was still around 150 basis points slower than in the prior quarter. David Vogt sees the easier comparison as one reason September performed better.
October will provide a more important test. Comparisons will be about 180 basis points tougher, and it will be the first full month of the App Store changes in the EU. The region accounts for just over 10% of trailing twelve-month App Store revenue. Apple’s growth outlook also depends on whether its next wave of premium devices can add meaningful revenue.
What Apple’s 37.69x Multiple Needs?
At 37.69x forward earnings, Apple trades at a roughly 28% premium to its 5-year average P/E of 29.54x. That premium requires stronger growth, and low-single-digit App Store growth alone is unlikely to support it. Apple trades at a premium to Nvidia despite the latter’s faster earnings growth. But which stock offers better value? Our Nvidia vs. Apple valuation comparison reveals which company has the stronger investment case
The earnings outlook shows why the recovery matters. EPS is expected to grow 18.38% in 2026, slow to 8.51% in 2027, and then accelerate to 12.94% and 16.73%. If the P/E returned to its 5-year average while earnings stayed the same, the stock would be about 22% lower. I think Apple’s quality warrants a premium, but the current valuation leaves limited room for weaker growth.
Hedge fund interest in Apple remained broadly stable, falling from 170 funds at the end of Q1 2026 to 169 funds at the end of Q2 2026. Short interest also remains low at just 0.88% of float as of September 15, 2026. September’s App Store rebound gives investors a reason for optimism, and there is little evidence of investors positioning heavily against the stock. Still, UBS says it is too early to draw broader conclusions. One strong month cannot fully support a premium multiple, making October’s tougher test more important.
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