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Billionaire investor Warren Buffett has been vocal about his love of Apple (NASDAQ:AAPL), once describing it as “probably the best business I know in the world”. That conviction shows in Berkshire Hathaway‘s portfolio, where Apple still represents roughly 20%-22% of disclosed US equity holdings, worth about $66bn-$70bn.
Clearly, that speaks volumes for the stock — but it’s only the starting point. When thinking ahead 10-20 years, is Apple still worth considering in 2026?
The investment case for Apple
Apple’s latest results suggest the technology giant’s still operating at full steam. In the third quarter of fiscal 2026 (to 27 June), revenue rose 16% year on year to $109.4bn — a third quarter record.
Diluted earnings per share climbed 29% to $2.02, helped by tariff refunds worth about $0.11 per share. iPhone sales jumped 22% to $54.3bn, while Mac revenue surged 29% to $10.4bn.
Services also hit a record for the period, up 12% to $30.7bn. Yet the stock fell roughly 6% after the results. Why? Guidance.
Management expects fourth quarter revenue growth of just 9%-11%, below the 12% analysts had modelled. CEO Tim Cook warned that supply constraints, particularly in memory chips driven by the AI data centre boom, will tighten through year-end.
An investor could see strong past results but still worry about whether component shortages and rising costs will cap near-term upside. So does it still justify the price?
Valuation, forecasts and macro risks
Wall Street’s consensus 12-month price target sits around $322-$332, implying modest single-digit upside from current levels. Targets range widely, from $215 to $400, reflecting different views on Apple’s AI roadmap and China exposure.
Some analysts, including TD Cowen, have set targets as high as $400, while others like Barclays remain Underweight with targets near $245.
One discounted cash flow (DCF) model suggests the price could be overvalued by as much as 22%. But brokers still seem optimistic, citing sustained double-digit services growth, margin expansion from selective price hikes, and a robust iPhone 18 cycle.
Still, several things could disrupt that path: memory shortages, foreign exchange pressures, and potential regulatory setbacks in China. These have all been tipped as possible risks.
With a gross margin already at 50.1% this quarter, even small cost increases could have an outsized impact on profitability.
My verdict
For long-term investors, the question isn’t whether Apple’s a great business but whether today’s price offers enough margin of safety given supply constraints and macro uncertainty.
The next AI-driven iPhone cycle could be enough of a catalyst to push the shares higher. But if supply chain bottlenecks ramp up component costs, the tight grip it has on the market could weaken. That would likely test even the most patient and dedicated of Buffett’s fans, and challenge the conviction of retail investors watching from the sidelines.
Institutional money’s particularly fickle. If it flows elsewhere in search of better risk/reward set-ups across the technology sector and wider market, Apple will need to prove its resilience once again in an increasingly competitive landscape.
Still, it remains a high-quality compounder with a loyal customer base and pricing power. Buffett’s historical endorsements remain relevant today and the valuation reflects that. Sure, it’s not a cheap stock – but it still deserves consideration.
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Mark Hartley does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
