Apple’s OpenAI Deal Requires In-House Innovation To Boost Growth


  • Apple Inc.’s OpenAI deal has opened up the potential for Apple to innovate in AI applications, and hardware, and further develop its operating systems to boost product demand.
  • Despite the potential in AI, management has not indicated enough critical innovation strategy to make results certain. Market saturation concerns and a lack of product innovation could reduce long-term growth.
  • Apple is overvalued, considering my operations analysis. I expect its P/E ratio to contract, with a base-case price CAGR target of roughly 12% over the next decade.

Productivity Apps - ChatGPT and others


I last covered Apple (NASDAQ:AAPL) in December 2023; I put out a Hold rating at the time, and since then, the stock has gained roughly 12% in price. Since the initial thesis, I have done multiple rounds of in-depth research into Apple, and

FWD P/E GAAP Ratio 31.83 23.33 37.74 83
Historical FWD P/E GAAP Ratio 5Y Avg 26.63 25.9 31.03 NM
FWD P/S Ratio 8.31 6.29 13.52 5.84
Historical FWD P/S Ratio 5Y Avg 6.27 5.68 10.36 9.21

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