Apple's $1 Trillion Surge Hangs on One Critical Number Tonight

This article first appeared on GuruFocus.

Apple (NASDAQ:AAPL) has been on a powerful upswing, climbing more than 30% since August as iPhone 17 sales reignite investor optimism. The company's valuation has ballooned from $3 trillion to $4 trillion, fueled by stronger-than-expected demand in the US and China. According to Counterpoint Research, the iPhone 17 outpaced its predecessor by 14% in the first ten days after launch, pushing analysts to lift their earnings forecasts by 7% in the past quarter. With results due after the bell Thursday, expectations are running high that Apple could post an earnings beat the kind of catalyst that might extend this rally further into year-end.

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Behind the surge is a broader narrative forming around Apple's next growth chapter. Portfolio manager John Belton of Gabelli Funds said the company appears to be entering a fundamental sweet spot, driven by replacement cycles, rising prices, and the early wave of AI-enabled upgrades. A foldable iPhone and enhanced AI capabilities could be the next major tailwinds, extending the product cycle beyond what investors had priced in just months ago. Yet, with Apple trading at nearly 34 times estimated earnings well above its 10-year average questions linger about whether that optimism is fully justified, especially as its revenue growth still trails peers like Microsoft and Alphabet.

Still, the setup could favor those betting on upside. Apple's stock has gained less than 9% this year, underperforming the Nasdaq 100's 23% rise leaving room for a potential catch-up trade if results surprise positively. Loop Capital recently initiated a buy rating on that thesis, arguing the iPhone cycle could be stronger than expected. Expectations are high, Belton noted, and we have to hope they're high for a good reason.

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