Can Apple's Momentum Last Through 2026? A Critical Look at AAPL's Position Among Tech Giants

The Rally So Far

Apple shares have surged 41.5% over the past six months, substantially outdistancing the Computer and Technology sector’s 28.4% gain. This outperformance stems from several converging factors: steady performance in its Services division, growing iPhone 17 adoption, and a refreshed product lineup for Mac and iPad. Yet this rally hasn’t been without friction—Apple Intelligence rollout has disappointed some investors, Chinese market pressures persist, and tariff uncertainties loom.

Trading above both the 50-day and 200-day moving averages signals bullish momentum. But can AAPL sustain this trajectory through 2026?

What’s Fueling Near-Term Growth

Device Sales and Market Leadership

The iPhone 16 claimed the title of best-selling smartphone globally in Q3 2025, per Counterpoint Research. Now, the iPhone 17 Pro Max is gathering steam through strong upgrade demand. Whispers suggest Apple plans to launch four additional iPhone models, including the iPhone 17e, iPhone 18 variants, and a folding device. Management has already guided for double-digit year-over-year iPhone revenue growth in the December quarter (Apple’s fiscal Q1 2026).

Mac sales represent another bright spot. The M5-powered 14-inch MacBook Pro delivers AI performance improvements of 3.5x over its predecessor and up to 6x compared to the older M1-equipped 13-inch model. Market share gains have been solid amid strong buyer appetite.

Services as the Hidden Engine

Apple’s Services segment—encompassing advertising, AppleCare, cloud infrastructure, digital content (Arcade, Music, Fitness+, TV, News+), and payment rails—benefits from an expanding installed base. New gaming titles are driving user expansion, while Apple TV+'s expanding content slate attracts subscribers. These recurring revenue streams provide stability and margins.

The Financial Foundation

Apple’s balance sheet remains robust. As of late September 2025, cash and marketable securities totaled $132.42 billion against $90.68 billion in term debt. Over the most recent quarter, the company returned nearly $24 billion to shareholders through dividends ($3.9 billion) and buybacks ($20 billion), demonstrating shareholder-friendly capital allocation.

What Analysts Expect

Consensus forecasts have tightened bullishly. The Zacks Consensus Estimate for Apple’s first-quarter fiscal 2026 earnings has risen three cents to $2.65 per share—a 10.42% year-over-year increase. Revenue projections stand at $137.46 billion, representing 10.59% growth compared to the year-ago period.

The Competitive Headwind

Here’s where the picture clouds. Apple trails competitors in AI execution. Alphabet, Amazon, and Microsoft have each invested more aggressively in generative AI capabilities. Over the past six months, Alphabet shares appreciated 31.4%, while Amazon and Microsoft declined 3% and 3.4%, respectively. In the broader tech landscape, companies like Alphabet have woven AI into search functions and ad targeting, Microsoft has capitalized on Copilot momentum (backed by a $250 billion Azure commitment with OpenAI), and Amazon’s AWS dominates enterprise AI and machine learning services.

Meanwhile, the smartphone market has intensified. Samsung’s Galaxy, Alphabet’s Pixel lineup, and Chinese makers all pose formidable challenges. In the PC space, HP, Dell Technologies, and Lenovo are racing to develop AI-capable machines.

The Valuation Question

Here’s the uncomfortable truth: Apple isn’t cheap. With a forward 12-month price-to-sales ratio of 8.97x versus the sector average of 6.82x and Amazon’s 3.12x, the stock trades at a significant premium. The Value Score of F underscores this stretched positioning.

The Bottom Line

iPhone sales tailwinds from the iPhone 16 and iPhone 17 are real. Services growth offers stability. Yet elevated valuation multiples and fierce competition across smartphones, personal computers, and artificial intelligence present genuine concerns for new entrants. AAPL currently carries a Zacks Rank of #3 (Hold)—a signal that waiting for a more attractive price point may be prudent for prospective investors seeking exposure to the tech sector without overpaying.

Disclaimer: Past performance is no guarantee of future results. This material is for informational purposes only and does not constitute investment, legal, accounting, or tax advice. No recommendation regarding suitability is implied. Hypothetical portfolio returns shown are based on Zacks Rank 1 stocks rebalanced monthly with zero transaction costs and do not represent actual portfolio results. The S&P 500 is an unmanaged index.