Apple Inc.
AAPL · Technology · Annual report 2026-09-26 · 9 reported years · Figures in USD
Market Cap
4.85T USD
Price on 2026-11-04
Average of the Three Values
1.96T USD
The plain average of EPV, Profit and FCFF
Intrinsic / Market Ratio
0.40×
Average / Market Cap, the ratio the list ranks by
Margin of Safety (Average)
-147.6%
1 − Market Cap / Average of the Three Values
Price / Book
43.21×
Market Cap / Book Value as printed (112.21B)
Greenwald Value, Case C: Earnings Power
1.45T USD
Protected franchise · -234.1%
Evidence: N is a note in the company's reports, F a line of its financial statements, R a fact from recent research; +n is n more sources. This page reads the company's own reports at its price date; the screener's values, the hollow dots, read the data provider's figures at their own date, so they differ on purpose.
Price vs Value
Every value of the company against the Market Cap on the price date above.
Bottom line
Apple's intrinsic value of 1.96T USD, the plain average of EPV + growth, Profit and FCFF, stands against a market cap of 4.84T USD, a margin of safety of -147.6%: a real franchise, priced far above what its printed years support. The verdict has room to spare: Profit and FCFF would have to come in at 308.7% of what is projected for the average to equal the price, so the price already needs every projected year and more. Greenwald's value on the case, 1.45T USD, is a reading beside this and not the verdict: it is the earnings power alone (case C), while the intrinsic value is higher because Profit and FCFF grow at 12.2% and 9.9% on the printed years, fade to a low long-run rate by the tenth year at their own return and discount rate, and receive back the capital and all they kept in the fifteenth year.Book Value
Assets less liabilities, as printed
Asset Value
What an entrant would spend to reproduce the assets, less what is owed
EPV + Growth Value
From the report's figures
Profit
From the report's figures
51% capital at year 15 · 49% 15 years of profit
FCFF
From the report's figures
34% capital at year 15 · 66% 15 years of free cash flow, before the net cash or net debt
Average of the Three
Uncapped, as the screener averages them
Greenwald Value, Case C: Earnings Power
The value Greenwald assigns on this case
How Each Value Is Built
The screener's three formulas on the report's own figures. Each card reads the same way: the value as a sum of numbered terms, each term's calculation opened under it, from the reported figures to the value. The verdict rests on their plain average, as the screener ranks; the Greenwald value on the company's case is a reading beside it.
What it is worth
EPV + Growth
1.72T USD
what the normal year's earnings are worth for ever, plus growth that pays
Profit
2.12T USD
15 years of cash the shareholders can take out, and the equity left at year 15
FCFF
2.04T USD
15 years of cash for shareholders and lenders, less what is owed
Average Intrinsic Value
1.96T USD
The plain average of EPV, Profit and FCFF
Against the price
Market Cap
4.85T USD
the price on the date above times the shares
Intrinsic Value ÷ Market Cap
0.40×
the ratio the screener ranks by
Margin of Safety
-147.6%
1 − Market Cap / Average Intrinsic Value
EPV of the Operations (NOPAT over WACC)
1.39T USD
Net Cash to the Shareholders
+64.72B USD
Growth Value
+268.15B USD
Value
1.72T USD
①EPV of the Equity
1.45T USD②Growth Value
268.15B USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
①Present Value of the 15 Years of FCFE
1.04T USD②Equity at Year 15, Today
1.08T USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
①Present Value of the 15 Years of FCFF
1.31T USD②Invested Capital at Year 15, Today
666.10B USD③Net Cash to the Shareholders
64.72B USDMarket value
The price on the date above times the shares.
Value vs market
1 minus the market cap as a share of the value.
1.72T USD
Average on the reported years
EPV + Growth Value, Profit and FCFF on the years as reported
+272.05B USD
R&D read as an investment
EPV + Growth Value +59.60B USD, Profit +367.98B USD, FCFF +388.56B USD
-29.19B USD
Growth by five-year blocks
Profit -97.21B USD, FCFF +9.64B USD
1.96T USD
Intrinsic value
the average the verdict rests on
Inflection: none, so the latest five reported years are read.
Cycle's peak: this check holds. The latest year's rise is led by an iPhone upswing and a Greater China rebound after a decline (N659, N661), and the region has swung sharply before (N1121). Margins also face a cost cycle: "We expect gross margin to be between 45 percent and 46 percent", with "most of that decline to be driven by higher memory costs" (R012, R013). One-off: this check holds on both sides. The latest margin was helped by tariff refunds ("a favorable impact of approximately 1 percentage point from tariff refunds", R010; N657), and "we have received the vast majority of the refunds" (R011), so little is left to come. The earliest printed year was depressed by "a one-time income tax charge of $10.2 billion, net" (N382), which flatters the growth from that base. One good year with no cause: this check partly holds, since only the latest year shows the jump and no report states a lasting cause for its size. Loss only smaller: this check does not apply, because the company is highly profitable throughout.
R&D: read as an investment that builds an asset over 5 years: the year's spend is capitalised and amortised over that life, instead of expensed.
Apple's R&D builds products that earn for years, not routine upkeep. Management calls it "critical to its future growth and competitive position" and ties it to "the development of new and updated products and services that are central to the Company's core business strategy" (N1125). The recent rise comes from "higher infrastructure-related costs, including investments in artificial intelligence, and headcount-related expenses" (N662), which is spending on future platforms. The income statement expenses all of it, and the segment table holds it in Corporate (N750).
Profit growth: the fundamental growth of the reported years.
FCFF growth: the fundamental growth of the reported years.
Profit growth by five-year blocks: years 1 to 5 12.2%, years 6 to 10 from 10.7% to 4.7%, years 11 to 15 4.7%, the risk-free rate of the report’s currency, the long-run ceiling of an economy’s growth. The return on new capital falls by year 10 to 4.5%, the average return on capital of the Consumer Electronics industry in US, 35 companies, 1987 to 2026.
FCFF growth by five-year blocks: years 1 to 5 9.9%, years 6 to 10 from 8.8% to 4.7%, years 11 to 15 4.7%, the risk-free rate of the report’s currency, the long-run ceiling of an economy’s growth. The return on new capital falls by year 10 to 8.1%, the average return on capital of the Consumer Electronics industry in US, 35 companies, 1987 to 2026.
Earnings Power vs Assets
Does the business earn more than it would cost to rebuild? Greenwald's test for a moat.
Asset Value
What a newcomer would spend to rebuild it, less what it owes; the bar runs from every asset at the cautious end of its inputs to every asset at the generous end (see Adjusted Balance Sheet)
476.85B – 1.26T
Earnings Power Value
What the business earns, as if it never grew
1.45T USD
Market Cap
What the market pays for all the shares
4.85T USD
Logarithmic axis: 0.80× and 1.25× are the same distance from 1×.
Case A: The Assets Earn Too Little
The business earns less than it would cost to rebuild. A newcomer would not build it, so the value is what it earns, not what its assets cost.
Case B: A Normal Business
It earns about what its assets cost to rebuild: no moat and no penalty. The value is the asset value.
Case C: Something Protects It (This Company)
It earns well above what its assets cost. Something keeps newcomers out, and that franchise is worth the difference.
The case changes across the asset value's low to high range, so it is not certain.
Franchise value
Earnings power value less asset value: what a moat is worth, negative when there is none.
665.73B USD
Bear case
The bear case rests on the asset value of 784.71B USD, within a range of 476.37B USD to 1.26T USD.
Base case
The base case rests on Greenwald's value on the case, 1.45T USD, a margin of -234.1% against the market cap.
Bull case
The bull case is the intrinsic value of 1.96T USD: the average of EPV + growth at 1.72T USD, Profit at 2.12T USD and FCFF at 2.03T USD.
Expected Return
What a buyer at this price earns a year if the business holds: cash returned, organic growth and reinvestment, against the cost of equity.
3.0%
Cash Returned
Earnings Power less the cost of today's debt after tax (its rate × the debt), 127.77B USD, × 115.3% paid out, over the market cap
3.3%
Organic Growth
Revenue growth of 8.2% a year, the average of the reported years (Returns, Payouts and Debt), × value over price of 0.40
-6.0%
Reinvestment
-21.47B USD kept beyond what organic growth needs × 13.55 of value created per unit, over the market cap
0.3%
Expected Return a Year
At value equal to price: 5.2%
Against a cost of equity of 9.5%: below it by 9.2%. At this price the business does not earn its cost of equity.
Paid out: the reported years' dividends and the buybacks beyond the shares issued, over net income, averaged. Value created per unit: the return on capital over the cost of equity. Working capital per unit of revenue: 4.8%.
What Comes Next
Dated events ahead that can matter to a holder, each with the quote that dates it.
- 16 Nov 2026Declared cash dividend of $0.27 per share payable to holders of record on November 12, 2026Dividends and buybacks
Upside for holders
It is cash already declared that reaches shareholders within the month.
- 2028Possible trial in the DOJ smartphone monopolization suit, which may not come until 2028 or longerLitigation
Either way for holders
The DOJ seeks equitable relief against the core smartphone business, so the outcome could change business practices rather than cost a stated sum.
Earnings Power, Step by Step
Average margin on sustainable revenue, average tax, depreciation above maintenance CapEx.
From Revenue to the Value of the Operations
479.31B USD
Latest Revenue
31.3%
Average Operating Margin, Latest 5 Reported Years
150.12B USD
Sustainable Operating Profit
17.5%
Average Tax Rate
7.17B USD
Depreciation Above Maintenance CapEx, After Tax
130.98B USD
Earnings Power (NOPAT)
9.4%
Cost of Capital (WACC)
1.39T USD
EPV of the Operations
Cost of equity: 4.68% the 10-year government bond in USD + beta 1.09 (the market's) × 4.46% the country's equity risk premium = 9.54%, in the currency of the figures it discounts.
Cost of debt after tax: no interest on the debt is printed: a 4% cost of debt after tax is assumed, as the screener does = 4.00%. Weighted 98.37% equity at the market cap, 1.63% debt: 9.45%.
The screener's rate, a check: 10.83%.
From the Operations to the Shareholders
EPV of the Operations
1.39T USD
Free Cash
cash the company may use freely
+36.34B USD
Assets the Business Does Not Need
Marketable securities portfolio, Deferred tax assets
+116.96B USD
Debt
financial debt and leases
-66.06B USD
Claims Ahead of the Shareholders
minority interests, a dividend already declared
0 USD
Legacy Liabilities
pensions, lawsuits, environment: inherited from the past
-22.52B USD
EPV of the Equity
1.45T USD
No cell reaches the price between 7.4% and 11.4% cost of capital.
EPV of the equity in USD; the outlined cell is the analysis's own. Green above the market cap (4.85T), red below.
Returns, Payouts and Debt
What each reported year earned, paid to shareholders and owed, as the report prints it, before any adjustment.
Return on Capital, 2026
96.1%
operating profit after tax over book plus net debt
Dividend Yield
0.3%
the latest year's dividends over the Market Cap on the price date above
Paid Out in All, 2026
77.3%
dividends and the buybacks beyond the shares issued, over profit
Net Debt over EBITDA, 2026
0.3×
years of operating profit before depreciation to repay it
Dividend policy: The Company intends to increase its dividend on an annual basis, subject to declaration by the Board, and raised the quarterly dividend from $0.26 to $0.27 per share beginning in May 2026. The share repurchase programs do not obligate the Company to acquire a minimum amount of shares.
Lenders' conditions
- The Indentures set only limited covenants on the Notes, which do not limit indebtedness or lease obligations, do not limit debt secured by liens and do not restrict dividends or share repurchases, so these terms leave borrowing and capital returns free.
- On a continuing event of default, such as interest unpaid for 30 days, the trustee or holders of at least 25% of a series under the 2013 Indenture or at least 33% under the 2018 Indenture can accelerate that series, and the notes report no such event.
Financial Statements
Every line the reports print, before any adjustment, then what is calculated from them. Open a period for the document it comes from.
Who Owns It
Every holder of 5% or more of the capital the reports and the research name (5% is the share at which holders must disclose), then the rest of the capital.
The Vanguard Group
Fund or institution
9.6%
BlackRock, Inc.
Fund or institution
7.1%
The rest of the capital
holders the reports and the research do not name
83.3%
Peers
The company against listings in the same industry: how the market prices them, what they earn.
| Peer | Market | Market Cap (USD) | Price / Book | ROE | Op. Margin |
|---|---|---|---|---|---|
SONO Sonos, Inc. | US | 2.10B | 5.19× | 14.2% | 4.4% |
005930.KS Samsung Electronics Co., Ltd. | KR | 1.06T | 2.82× | 30.8% | 52.2% |
6758.T Sony Group Corporation | JP | 154.22B | 2.84× | 13.2% | 16.7% |
3CP.F Xiaomi Corporation | DE | 79.86B | 2.01× | 12.6% | 4.0% |
6752.T Panasonic Holdings Corporation | JP | 68.08B | 2.02× | 5.3% | 9.2% |
066570.KS LG Electronics Inc. | KR | 21.31B | 1.03× | 5.3% | 6.6% |
3296.HK HUAQIN | HK | 12.78B | 2.65× | 18.5% | 1.4% |
003550.KS LG Corp. | KR | 11.54B | 0.54× | 3.5% | 24.9% |
0668.HK Anker Innovations Technology Co., Ltd. | HK | 8.13B | 4.69× | 30.3% | 12.8% |
1070.HK TCL Electronics Holdings Limited | HK | 5.65B | 2.09× | 15.9% | 4.4% |
2636.HK Shenzhen Transsion Holdings Co., Ltd. | HK | 5.63B | 1.79× | 15.5% | 5.5% |
034220.KS LG Display Co., Ltd. | KR | 3.24B | 0.65× | -17.6% | -1.9% |
Consumer Electronics in the screener: 12 of 34, the same market first, then the closest in size. The company's own figures are from its report (2026): net income over the printed book value, operating profit over revenue.
In Our Strategy
Where the screener ranks the company and whether the strategy would buy it.
Not in what the strategy buys
Place 1,761 of 2,309 by value in its market (US). The strategy buys the first 25.
Place 1 is the cheapest: the highest value over market cap. Only companies above their market's floor count, $1B in every market and $500M in Romania, and a company listed in several markets counts once.
Adjusted Balance Sheet
From the book value the balance sheet prints to the asset value a buyer would count.
Book Value
assets less liabilities, as printed
112.21B USD
Marketable securities
+80.29B USD
Marketable securities
+20.44B USD
Other non-current assets
-4.17B USD
Term debt
+14.13B USD
Apple brand
not in the balance sheet
+325.19B USD
Product portfolio and technology
not in the balance sheet
+274.86B USD
Organisation
not in the balance sheet
+56.60B USD
Trained workforce
not in the balance sheet
+6.69B USD
Asset Value
at reproduction, less what is owed
785.50B USD
Investor Checklist
The questions to ask of any business, answered from the reports and research, or marked unknown.
Answered
22
questions
Not applicable
0
questions
Unknown
0
questions
business
The largest customers, products, suppliers and countries, and their share of revenue.
Revenue leans on one product family and two countries, not on any single buyer. We read the reports as naming iPhone the main driver, and the printed split is Products 355,533,000,000 against Services 123,301,000,000 for fiscal 2026. The notes behind this answer give no iPhone or country share we can state here.
- Products: we read iPhone as the largest category and the main driver of the latest year's growth (N659), with one product category giving a significant part of net sales (N650).
- Customers: older reports state no customer passes the threshold of net sales (fiscal 2020 and 2021, N990, N1156). In fiscal 2026 we read one customer as holding a large share of trade receivables and cellular carriers about a third (N684, N685). About approximately 60% of net sales go through indirect channels (N623).
- Countries: only the U.S. and China passed the country threshold in the older reports that state it (N991, N315). We read Greater China, which covers mainland China, Hong Kong and Taiwan, as a volatile contributor with a sharp rebound in the latest year (N661, N754).
- Suppliers: we read many components as single-source, nearly all final assembly as done by partners mainly in Asia, and two vendors as holding most of the vendor non-trade receivables (N629, N686).
- Licensing: a press report puts Google's payment to Apple at $20 billion a year, a press figure and not one from Apple's reports (R004).
Fixed against variable costs, operating leverage, the main cost lines and what drives them.
The reports print no split of fixed against variable costs. Our reading is that cost of sales moves mainly with volume and component prices, while R&D and much of SG&A behave as fixed, which gives operating leverage: in fiscal 2026 operating income of 158,063,000,000 rose from 133,050,000,000.
- Products cost of sales, 215,874,000,000: driven by mix, tariffs and component prices, with supply constraints and rising costs for semiconductors, memory and storage (N655, N657, N636).
- Services cost of sales, 29,358,000,000: far smaller against Services sales of the same year (F161, F157).
- Research and development, 45,765,000,000 against 34,550,000,000 a year earlier: we read the rise as coming from infrastructure including AI and headcount (N662).
- Selling, general and administrative, 29,774,000,000 (F166).
- Variable lease costs: we read them as far above fixed lease costs and based largely on output purchased from leased assets, a rental-like cost that never appears as a lease liability (N716).
How revenue, volumes and margins moved through past cycles and shocks.
Apple's shocks have been supply, currency and product timing more than collapses in demand. Total net sales printed 391,035,000,000, 416,161,000,000 and 478,834,000,000 over the last three years, and we read gross margin as rising through most of the period, including the year sales fell.
- Fiscal 2020: we read the pandemic as closing many stores and iPhone launches as moving to October, shifting revenue out of the year (N832, N833).
- Fiscal 2021: we read this as an exceptional year with growth in all categories, despite supplier and logistics shortages (N1117, N1153, N053).
- Fiscal 2023: we read net sales as falling with currency weakness explaining more than the whole fall, with margin still rising, in a year one week longer than its neighbours (N219, N233, N372).
- Current memory shock: Counterpoint says global shipments fell 20% in Q3 2026, and IDC forecasts a 16.7% fall in 2026 shipments while market value rises 6.3% (R020, R021, R022). Apple reported September quarter revenue of $114.5 billion, up 12 percent (R015).
- Seasonality: we read the first fiscal quarter as historically the strongest because of holiday demand (N022).
industry
What could replace the product or shrink the industry: substitutes, technology, energy transition, regulation.
The evidence names no product replacing the smartphone; the live threats are regulation that opens the platform, AI capacity and dependence, and memory costs shrinking unit markets. Energy transition does not appear as an issue in the reports.
- Alternative distribution and payment: we read developers using them as possibly paying lower or no commission (N647, N638).
- Interoperability rules: we read them as having led, and possibly leading, Apple not to launch or keep products such as Siri AI in some jurisdictions (N641).
- Artificial intelligence: we read Apple as investing heavily and committing to capacity, with few third-party providers able to meet compute demand (N634, N744). Apple and Google announced a multi-year partnership for Apple Foundation Models built on Google's technology (R018).
- Unit markets: IDC expects memory prices to keep rising until at least 2028 and forecasts a modest recovery of 2%, then a rebound of 5.2% YoY in 2028 (R039, R056). We read this as a cost cycle rather than a terminal decline.
moat
Return on equity and on capital over the years in the statements, against the cost of capital.
Returns stand far above the cost of capital: the projections take a return on equity of 84.0% and a return on capital of 55.9% for years one to five, against a cost of equity of 9.5% and a cost of capital of 9.4%. The return on equity is flattered by a small equity base after years of buybacks, so the return on capital is the better measure.
- Net income: 93,736,000,000, 112,010,000,000 and 132,175,000,000 over fiscal 2024 to 2026 (F124, F148, F172).
- Shareholders' equity at those year ends: 56,950,000,000, 73,733,000,000 and 112,093,000,000 (F034, F069, F105).
- Operating income: 123,216,000,000, 133,050,000,000 and 158,063,000,000 (F120, F144, F168).
- Fading: both projections let the return fall to the cost of capital in the long run, because no evidence states how long the barriers last.
When the protections expire or could erode: licence or concession end dates, patent expiries, regulatory reviews, contract renewals.
No licence or concession end date exists, because none protects the business; the protections erode through rulings, contract renewals and share rather than on a calendar. No evidence states how long the barriers last.
- App Store: the injunction on link-out commissions (N642), with the Supreme Court argument scheduled for Jan. 11 (R051) and the level of any commission open (N652).
- Search licensing: we read the arrangements as possibly not renewed on favourable terms or at all, whatever the legal outcome (N648, N649).
- EU: in the fiscal 2025 report the Commission may impose fines up to 10% of Apple's annual worldwide net sales on a final violation in the Article 6(4) Investigation (N489).
- DOJ: a trial may not come until 2028 or longer, on a tracker's July 2025 update (R008).
- Premium share: Apple's fell to 65% in H1 2026 from 74% in H1 2022, with Samsung at 19% (R054, R026).
- Patents: no expiry schedule is given, and no single right is solely responsible for protecting the products (N191).
- Contracts: we read digital content licences as short-term, in an older report, and component supply agreements as possibly not renewed on similar terms (N819, N962).
earnings
One-off items, accruals against cash, capitalised costs, stock-based pay, provisions built or released.
Earnings are backed by cash: fiscal 2026 cash generated by operations was 145,097,000,000 against net income of 132,175,000,000. The main adjustments are tariff refunds inside the latest margin and stock pay that operating cash flow adds back.
- One-offs: we read tariff refunds as reducing products cost of sales (N656, N657). The September quarter gross margin of 47.9 percent included about 1 percentage point from them (R010).
- Prior-year one-off: we read the fiscal 2024 tax charge as raised by a one-time State Aid charge (N381, N529).
- Stock-based pay: 11,688,000,000, 12,863,000,000 and 13,789,000,000 over fiscal 2024 to 2026 (F184, F217, F252). We read its value at vesting as above the recorded expense and the related tax payments as sitting in financing flows (N735, N736).
- Accruals: we read the jump in inventories as a components build against supply constraints, with a printed cash outflow of -8,905,000,000, and other assets took -21,117,000,000 (N683, F257, F258).
- Capitalised costs: research is expensed; we read licensed intangibles as growing sharply and a coming standard as possibly changing when internal-use software is capitalized (N696, N601).
- Provisions: we read reserves as accrued for cancellation fees on excess orders (N475); the evidence shows no large release.
Capital spending needed just to keep capacity, against growth spending and against depreciation.
The reports do not split maintenance from growth spending. Payments for property, plant and equipment were -9,041,000,000 in fiscal 2026 against depreciation and amortization of 13,423,000,000, so printed spending ran below the charge in the latest year.
- Fiscal 2025: -12,715,000,000 against 11,698,000,000 (F231, F216).
- Fiscal 2024: -9,447,000,000 against 11,445,000,000 (F198, F183).
- Composition: we read the charge as including rising intangible amortization, so depreciation on property alone is the closer comparison (N681, N699).
- Earnings power: it takes maintenance capital below printed spending and credits the excess of depreciation over it after tax; this is an estimate by rule, not a figure from the reports.
- Direction: we read data centre capacity as raising capital needs, with AI costs also running through R&D and leases, so the latest year's low spending may not last (N633, N682).
balance sheet
Guarantees, purchase commitments, leases, pensions, litigation, environmental and decommissioning duties, obligations at the end of a concession.
The largest off-balance-sheet duty is manufacturing purchase obligations of $89.7 billion, with $82.7 billion payable within 12 months. Decommissioning and concession-end duties do not appear in the evidence, and no defined benefit pension is shown in the older note that addresses retirement plans.
- Purchase commitments: management says manufacturing purchase obligations rose by $33 billion from June to September (R014). We read further noncancelable obligations as covering supplier arrangements, licensed content, intellectual property, distribution rights and capital assets (N668).
- Leases: we read fixed lease payment obligations as debt-like, with additional leases not yet commenced outside the liabilities and variable lease costs never appearing as a liability (N669, N724, N716).
- Tax: gross unrecognized tax benefits of $22.5 billion, of which $10.6 billion would impact the effective tax rate if recognized (N714); this amount is deducted from the earnings power value.
- Litigation, with no deduction because no usable amount exists:
- The Commission fined Apple €500 million, under appeal (N487), and may impose fines up to 10% of annual worldwide net sales in the second investigation (N489).
- The DOJ suit and follow-on civil suits seeking monetary damages (N490, N491).
- Claimant counsel says approximately £1.5 billion is due in the Kent class action, its appeal status unconfirmed (R009).
- Guarantees: we read indemnities in Apple's agreements as an unquantified cost, and warranty service as staying with Apple despite outsourcing (N480, N479).
- Pensions: an older report's note on the company match on retirement contributions shows no defined benefit obligation (N950, fiscal 2020).
Debt, maturities, covenants, refinancing needs, liquidity.
Debt is modest and the balance sheet liquid: net debt to EBITDA is 0.26x, with commercial paper of 1,997,000,000, current term debt of 9,906,000,000 and non-current term debt of 68,208,000,000 at fiscal 2026 year end. Cash was 36,305,000,000, with marketable securities of 20,417,000,000 current and 80,213,000,000 non-current.
- Maturities: 9,906,000,000 of term debt sits in current liabilities (F093). No term debt issuance is printed in fiscal 2026, with repayments of -12,396,000,000 and commercial paper repayments of -5,911,000,000 (F273, F274, F275).
- Covenants: we read the fiscal 2025 descriptions as limited covenants that cap neither debt nor leases, do not restrict secured debt, and leave dividends and buybacks free (N613, N614, N615).
- Rates: we read a rate rise as raising annual interest on term debt only slightly, and the notes' fair value as below principal (N693, N728).
- Liquidity: we read management as stating that cash and securities cover needs and the capital return for the next twelve months and beyond (N664).
Assets the business does not need to run: surplus cash, investments, idle land or plant.
The business does not need its cash and securities to run: cash of 36.30B USD and the marketable securities portfolio are added beside the earnings power. We read the portfolio's latest-year table as measured at fair value, with no restriction printed for the latest year.
- Marketable securities: 20,417,000,000 current and 80,213,000,000 non-current (F074, F081). We read a rate rise as lowering their fair value and corporate debt as the largest holding (N692, N689).
- Restrictions: we read part of cash and securities as in escrow for the State Aid obligation in the prior year (N581, N582), with that liability since paid out of income taxes payable (N542).
- Deferred tax assets: we read them as a separate, non-operating part of other non-current assets, valued below book because the tax saving arrives later (N701).
- Land and buildings: we read them as carried at cost, so book value can sit below current value, notably on land; this is not counted (N595).
- Equity stakes: non-marketable stakes appear in an older report (N897, fiscal 2020); no current value is available.
management
Dividends, buybacks, investments and acquisitions over time, and what they returned.
Almost all the cash generated goes back to shareholders, overwhelmingly through buybacks. In each of the last three years buybacks and dividends together stayed below cash generated by operations, while growth has been mainly organic and expensed through R&D.
- Buybacks: -94,949,000,000, -90,711,000,000 and -86,390,000,000 over fiscal 2024 to 2026 (F204, F237, F272). We read shares issued to employees as partly offsetting them (N675). With the market cap above the intrinsic value, buybacks at today's price would return less than they cost on this file's values.
- Dividends: -15,234,000,000, -15,421,000,000 and -15,721,000,000 (F203, F236, F271). The board declared $0.27 per share (R059), and Apple intends to raise the dividend every year, subject to the Board (R047).
- Framework: the repurchase programs carry no minimum obligation (R048), and management said it no longer uses net cash neutral as a target (R049).
- Investment: R&D of 45,765,000,000 is the largest reinvestment (F165).
- Acquisitions: we read spending as small in the older report that addresses it (N885, fiscal 2020), and press sources say Apple paid close to $2 billion for Q.ai (R017).
Minority protection, related-party dealings, the board and its independence (the main shareholders have their own section).
Shareholder rights look sound on what is printed, with a single vote per share and no controlling holder in the evidence; the reports read here do not assess board independence or related-party dealings, so those remain open. Executive Chair Timothy D. Cook signs as a director, and we read this as a transition with the former chief executive staying on the board.
- Votes: we read one vote per share and removal of directors without cause by a majority of outstanding shares (N147, N148, both from older reports).
- Limits: we read the articles and bylaws as possibly delaying a change of control, with holding conditions on proxy nominations and special meetings (N151, N618, N619).
- Insiders: we read hedging and pledging of company stock as barred, and incentive pay as recoverable after a restatement (N458, N459, N460).
- Reporting: we read the auditor's opinion as clean and internal control as effective in the newest report, with a long audit relationship (N759, N760, N761).
- Main holder: the 2026 proxy lists The Vanguard Group with 9.63% (R057).
Who runs it, their record, their incentives, turnover.
John Ternus signs the fiscal 2026 report as Chief Executive Officer, Timothy D. Cook as director and Executive Chair, and Kevan Parekh as Senior Vice President and Chief Financial Officer. The new chief executive's record in that post is too short to judge from the evidence; the printed results belong to the previous leadership.
- Incentives: we read performance units as vesting on relative total shareholder return against the S&P 500, with vesting above target barred when the return is negative (N1029, N1030, N1031). We read the newest filed form as leaving thresholds blank, so the payout cannot be worked out from it (N783).
- Retention: we read retirement terms as weakening the hold on long-serving senior staff (N778).
- Turnover: besides the change of chief executive, we read the Principal Accounting Officer as stepping down with an internal successor, in the fiscal 2025 report (N602, N603).
- Insider sales: we read a senior officer's sales as following a pre-arranged plan (N762).
regulation
Who regulates, how prices or tariffs are set, the allowed return, the next review.
No regulator sets Apple's prices or an allowed return, so tariffs and allowed returns do not apply; the pressure comes from competition authorities and courts acting on App Store terms and smartphone conduct.
- European Commission: on April 23, 2025 it fined Apple €500 million in the Article 5(4) Investigation, and Apple has appealed (N487, N488). Apple has changed iOS, iPadOS, the App Store and Safari in the EU to seek to comply with the DMA (N638).
- EU terms: MacRumors reports a 26% fee on App Store apps using in-app purchase, and Apple will charge a 5% Core Technology Commission on apps from alternative marketplaces; the terms took effect on October 1 (R052, R005, R006). Apple says the changes resolve its disagreements with the Commission (R007).
- U.S. DOJ: the suit filed on March 21, 2024 alleges monopolization or attempted monopolization (N490), and a trial may not come until 2028 or later (R008).
- U.S. courts on the App Store: the injunction on link-out commissions (N642), and the Supreme Court argument scheduled for Jan. 11 on Apple's challenge to a contempt order (R051, R001).
Special taxes, state intervention, currency, country risk.
The main risks are trade tension over a supply chain concentrated in Asia, tax rules, and the dollar. These already reach results rather than sit as theory.
- Tariffs: we read new U.S. import tariffs as hitting the countries where production is concentrated, and tariffs struck down by the Supreme Court as the source of the refunds (N636, N656).
- China: we read long-lived assets there as mainly tooling, process equipment and retail assets (N1101, older report), and Greater China sales as volatile (N661). China's row prints an equity risk premium of 5.14% (R042).
- Trade restrictions: we read them as able to raise cost or limit availability of products, components and rare earths (N742).
- Tax: we read the State Aid dispute as ended against Apple by the European Court of Justice (N382, N383), Singapore incentives as lowering the rate, and a minimum top-up tax as already appearing (N710, N711).
- Currency: we read a stronger dollar as hurting sales and margins (N586).
- Russia: we read an older report as disclosing licensed notifications with the FSB and a Russian subsidiary, with no reported revenue from that engagement (N1162, N1175).
technology
The systems the business runs on (control, IT, automation): their state, cyber risk, obsolescence.
The evidence on systems is thin: it describes the compute base and its dependencies, but says nothing here on the state of IT systems, cyber incidents or obsolescence, so those remain unassessed.
- Compute: we read Apple as running its own data centres and relying on third-party cloud providers (N631), with few providers able to meet compute demand (N744).
- Physical exposure: we read many operations and data centres, and critical supplier operations, as sitting in earthquake-prone locations (N632).
- Software: we read internal-use software as capitalized and amortized, in an older report, with a coming standard changing when it is capitalized (N1097, N709).
For a technology-driven business: switching costs, network effects, proprietary data, R&D as investment, marginal cost of scale, retention.
The moat is the two-sided platform: over 2.5 billion active devices, developers following users and users following apps, which cannot be bought or built by spending. No retention or switching rate is printed, so captivity is inferred from the installed base, share and margins rather than measured.
- R&D as investment: 31,370,000,000, 34,550,000,000 and 45,765,000,000 over fiscal 2024 to 2026 (F117, F141, F165). We read management as treating it as critical to its competitive position (N1125, older report), and treating it as investment raises the projections.
- Scale: this budget is spread over global sales, which a smaller maker could match only at a heavier cost per unit. Apple's total gross margin percentage reached 48.8% (N658).
- Proprietary technology: new products often use custom components from one source, with thousands of patent applications pursued (N743, N1039), but no single right is solely responsible for protection (N191).
- Pressure: we read lower or no commission as possible for developers using alternative routes (N647), and the partnership with Google shows reliance on outside AI technology (R018).
Age and condition of the physical assets, remaining life, deferred maintenance.
We read the asset base as heavily depreciated yet not neglected: the newest report's gross and net figures point to an old book (N680), while the only direct statement on condition, from fiscal 2020, reads as facilities in good condition with no deferred maintenance flagged (N028). Net property, plant and equipment was 52,084,000,000 at fiscal 2026 year end.
- Lives: we read equipment as short-lived and buildings as long-lived, which keeps equipment close to current prices (N074).
- Book against value: we read land and long-lived buildings as at cost, so probably worth more than book (N595).
- Location: we read part of the tooling as sitting at suppliers (N1101), and part of the footprint as leased on terms up to about a decade (N598).
- Remaining life: no figure is printed in the evidence.
market
What the price implies, liquidity, analyst coverage, why the market pays what it pays.
The market cap of 4.84T USD is 3.34x the earnings power value and far above the intrinsic value of 1.96T USD; at this price Profit and FCFF would have to come in at 308.7% of what is projected. The return a year from buying at today's price is 0.3%, with a dividend yield of 0.3%. Analyst coverage and trading liquidity are not in the evidence.
- Why the market pays this, in our reading: recent momentum, with September quarter revenue of $114.5 billion, up 12 percent (R015); Services expected to grow 8 to 9 percent in the December quarter (R016); and an all-time-high installed base (R027).
- Against book: the price compares with printed equity of 112.09B USD, of little use for a business whose main assets are not on the balance sheet.
- Holders: the 2026 proxy lists The Vanguard Group with 9.63% (R057), and Berkshire cut its position by about 4% in the fourth quarter of 2025 (R019).
Why the gap might never close.
Here the gap runs the other way: the price stands above the value, and it might not close through a fall in the price. A franchise of this quality can hold a high price for a long time while its earnings grow toward it.
- Value catching up: net income growing faster than projected would close the gap from below, as the latest year's sales growth might suggest (R015).
- Steady buyers: buybacks of -86,390,000,000 in fiscal 2026, funded from 145,097,000,000 of operating cash, give constant demand for the shares (F272, F261).
- Conservative fading: the projections let returns fall to the cost of capital for lack of evidence on how long barriers last; if they last longer, the value is too low.
- The reverse risk: the franchise could erode slowly, as the premium share is doing (R054), without any single event forcing the price to adjust.
decision
The facts that, if observed, would prove the conclusion wrong.
The conclusion is that the price needs far more than the printed years support. These observations would prove it wrong, or show that even the value given is too high.
- Growth well above 12.2% sustained over years rather than one strong year, in earnings and not only in sales (R015).
- Gross margin holding above the 45 percent to 46 percent guided for the December quarter while memory costs keep rising (R012, R013).
- Services growing clearly faster than the 8 to 9 percent expected for the December quarter, for several years (R016).
- A court outcome that restores App Store commissions at a high level, following the Supreme Court argument on Jan. 11 and the remand (R051, N652).
- Apple's premium share recovering from 65% rather than slipping further (R054).
- AI investment producing a return that shows in printed earnings (N634).
- In the other direction: remedies prohibiting Google's commercial terms or a non-renewal of search licensing, which would make even 1.45T USD too high (N648, N649).
- Also in the other direction: manufacturing purchase obligations of $89.7 billion leading to write-downs or cancellation fees if demand falls (R046).
| Question | Answer | Evidence | |
|---|---|---|---|
| business | |||
| The largest customers, products, suppliers and countries, and their share of revenue. | Revenue leans on one product family and two countries, not on any single buyer. We read the reports as naming iPhone the main driver, and the printed split is Products 355,533,000,000 against Services 123,301,000,000 for fiscal 2026. The notes behind this answer give no iPhone or country share we can state here.
| ||
| Fixed against variable costs, operating leverage, the main cost lines and what drives them. | The reports print no split of fixed against variable costs. Our reading is that cost of sales moves mainly with volume and component prices, while R&D and much of SG&A behave as fixed, which gives operating leverage: in fiscal 2026 operating income of 158,063,000,000 rose from 133,050,000,000.
| ||
| How revenue, volumes and margins moved through past cycles and shocks. | Apple's shocks have been supply, currency and product timing more than collapses in demand. Total net sales printed 391,035,000,000, 416,161,000,000 and 478,834,000,000 over the last three years, and we read gross margin as rising through most of the period, including the year sales fell.
| ||
| industry | |||
| What could replace the product or shrink the industry: substitutes, technology, energy transition, regulation. | The evidence names no product replacing the smartphone; the live threats are regulation that opens the platform, AI capacity and dependence, and memory costs shrinking unit markets. Energy transition does not appear as an issue in the reports.
| ||
| moat | |||
| Return on equity and on capital over the years in the statements, against the cost of capital. | Returns stand far above the cost of capital: the projections take a return on equity of 84.0% and a return on capital of 55.9% for years one to five, against a cost of equity of 9.5% and a cost of capital of 9.4%. The return on equity is flattered by a small equity base after years of buybacks, so the return on capital is the better measure.
| ||
| When the protections expire or could erode: licence or concession end dates, patent expiries, regulatory reviews, contract renewals. | No licence or concession end date exists, because none protects the business; the protections erode through rulings, contract renewals and share rather than on a calendar. No evidence states how long the barriers last.
| ||
| earnings | |||
| One-off items, accruals against cash, capitalised costs, stock-based pay, provisions built or released. | Earnings are backed by cash: fiscal 2026 cash generated by operations was 145,097,000,000 against net income of 132,175,000,000. The main adjustments are tariff refunds inside the latest margin and stock pay that operating cash flow adds back.
| ||
| Capital spending needed just to keep capacity, against growth spending and against depreciation. | The reports do not split maintenance from growth spending. Payments for property, plant and equipment were -9,041,000,000 in fiscal 2026 against depreciation and amortization of 13,423,000,000, so printed spending ran below the charge in the latest year.
| ||
| balance sheet | |||
| Guarantees, purchase commitments, leases, pensions, litigation, environmental and decommissioning duties, obligations at the end of a concession. | The largest off-balance-sheet duty is manufacturing purchase obligations of $89.7 billion, with $82.7 billion payable within 12 months. Decommissioning and concession-end duties do not appear in the evidence, and no defined benefit pension is shown in the older note that addresses retirement plans.
| ||
| Debt, maturities, covenants, refinancing needs, liquidity. | Debt is modest and the balance sheet liquid: net debt to EBITDA is 0.26x, with commercial paper of 1,997,000,000, current term debt of 9,906,000,000 and non-current term debt of 68,208,000,000 at fiscal 2026 year end. Cash was 36,305,000,000, with marketable securities of 20,417,000,000 current and 80,213,000,000 non-current.
| ||
| Assets the business does not need to run: surplus cash, investments, idle land or plant. | The business does not need its cash and securities to run: cash of 36.30B USD and the marketable securities portfolio are added beside the earnings power. We read the portfolio's latest-year table as measured at fair value, with no restriction printed for the latest year.
| ||
| management | |||
| Dividends, buybacks, investments and acquisitions over time, and what they returned. | Almost all the cash generated goes back to shareholders, overwhelmingly through buybacks. In each of the last three years buybacks and dividends together stayed below cash generated by operations, while growth has been mainly organic and expensed through R&D.
| ||
| Minority protection, related-party dealings, the board and its independence (the main shareholders have their own section). | Shareholder rights look sound on what is printed, with a single vote per share and no controlling holder in the evidence; the reports read here do not assess board independence or related-party dealings, so those remain open. Executive Chair Timothy D. Cook signs as a director, and we read this as a transition with the former chief executive staying on the board.
| ||
| Who runs it, their record, their incentives, turnover. | John Ternus signs the fiscal 2026 report as Chief Executive Officer, Timothy D. Cook as director and Executive Chair, and Kevan Parekh as Senior Vice President and Chief Financial Officer. The new chief executive's record in that post is too short to judge from the evidence; the printed results belong to the previous leadership.
| ||
| regulation | |||
| Who regulates, how prices or tariffs are set, the allowed return, the next review. | No regulator sets Apple's prices or an allowed return, so tariffs and allowed returns do not apply; the pressure comes from competition authorities and courts acting on App Store terms and smartphone conduct.
| ||
| Special taxes, state intervention, currency, country risk. | The main risks are trade tension over a supply chain concentrated in Asia, tax rules, and the dollar. These already reach results rather than sit as theory.
| ||
| technology | |||
| The systems the business runs on (control, IT, automation): their state, cyber risk, obsolescence. | The evidence on systems is thin: it describes the compute base and its dependencies, but says nothing here on the state of IT systems, cyber incidents or obsolescence, so those remain unassessed.
| ||
| For a technology-driven business: switching costs, network effects, proprietary data, R&D as investment, marginal cost of scale, retention. | The moat is the two-sided platform: over 2.5 billion active devices, developers following users and users following apps, which cannot be bought or built by spending. No retention or switching rate is printed, so captivity is inferred from the installed base, share and margins rather than measured.
| ||
| Age and condition of the physical assets, remaining life, deferred maintenance. | We read the asset base as heavily depreciated yet not neglected: the newest report's gross and net figures point to an old book (N680), while the only direct statement on condition, from fiscal 2020, reads as facilities in good condition with no deferred maintenance flagged (N028). Net property, plant and equipment was 52,084,000,000 at fiscal 2026 year end.
| ||
| market | |||
| What the price implies, liquidity, analyst coverage, why the market pays what it pays. | The market cap of 4.84T USD is 3.34x the earnings power value and far above the intrinsic value of 1.96T USD; at this price Profit and FCFF would have to come in at 308.7% of what is projected. The return a year from buying at today's price is 0.3%, with a dividend yield of 0.3%. Analyst coverage and trading liquidity are not in the evidence.
| ||
| Why the gap might never close. | Here the gap runs the other way: the price stands above the value, and it might not close through a fall in the price. A franchise of this quality can hold a high price for a long time while its earnings grow toward it.
| ||
| decision | |||
| The facts that, if observed, would prove the conclusion wrong. | The conclusion is that the price needs far more than the printed years support. These observations would prove it wrong, or show that even the value given is too high.
| ||
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