Apple reported record fiscal 2026 revenue. Earnings per share rose 20%.
Despite these results, a Seeking Alpha analyst issued a "sell" rating on the stock. The analyst cited high valuation and concerns over future profitability. The report argues the company's stock is too expensive at 39 times trailing earnings. Forward guidance suggests potential margin compression.
Rising costs for memory chips and investments in artificial intelligence are expected to pressure gross margins. This pressure is anticipated in the upcoming holiday quarter. Apple's management guided for December quarter operating profit to be flat to down. This guidance comes even with projected revenue growth. Growth in the high-margin Services segment has shown signs of slowing.
The "sell" rating represents a more bearish view. Other analysts raised their price targets following the strong annual results. The analyst consensus remains a "Moderate Buy." This reflects a division among analysts. Some focus on recent strong performance. Others are cautious about future growth and profitability headwinds.