Following Nvidia inventory’s current dip, Apple (NASDAQ: AAPL) has as soon as once more taken the crown of the S&P 500‘s largest company. This is the case even after the iPhone maker’s 9.3% year-to-date share price fall. The inventory underperformed the index within the course of.

Having stated that, I’m certain longer-term shareholders aren’t too frightened. Apple inventory continues to be up 270% in 5 years, pushing the market cap effectively above $3trn.

For context, that’s over than 100 occasions bigger than Nokia, the agency that Apple disrupted with the launch of the groundbreaking iPhone in 2007.

What’s happening?

There appear to be a couple of the explanation why Apple inventory has paused for a well-deserved breather in 2025.

For starters, the know-how sector has suffered a sell-off previously couple of weeks. President Trump’s on-off tariffs are inflicting uncertainty within the inventory market, they usually might even impression the agency’s earnings sooner or later. Whereas these dangers linger, the Apple share price is more likely to be unstable.

Additionally, the inventory is buying and selling at 34 occasions earnings, which is a premium to the already expensive S&P 500. So there may be a priority about valuation right here. And this was probably a think about Warren Buffett’s determination to chop his large stake to lower than half what it was.

Lastly, Apple has suffered a slowdown in iPhone gross sales, particularly in China. That is down to elevated competitors and market saturation, as effectively delays in rolling out important AI upgrades for its units.

AI teething issues

This final level is value increasing on, as some buyers concern that Apple may be shedding floor as we transfer deeper into the AI age. It has launched Apple Intelligence on the brand new iPhone 16, however the AI-equipped model of Siri has been delayed resulting from glitches. This reportedly may not be out until subsequent 12 months now.

Whereas that is clearly removed from ideally suited, I believe the corporate has time and can get this proper. In any case, it would take a number of years for all 2bn+ iOS customers to improve to units with superior AI capabilities.

Apple has stated its AI options will prioritise preserving information on customers’ units fairly than within the cloud. This might entice customers involved about information privateness.

I believe these are AI teething issues that will probably be largely forgotten about a couple of years from now. As a buyer, it’s not a deal-breaker for me, as I’ll nonetheless be upgrading to a brand new Apple telephone quickly. I’m more than pleased to be locked into the agency’s extremely sticky ecosystem.

Will I purchase the inventory then?

Analysts count on income and earnings per share to develop 4.6% and eight.6% respectively this 12 months. That’s not significantly excessive progress for a inventory that’s buying and selling at 29 occasions ahead earnings.

In fact, it goes with out saying that Apple is an unbelievable firm and model. It generated over $100bn in free money circulation final 12 months and introduced a $110bn share buyback programme in Might. That was the most important in US company historical past!

Nevertheless, because of the premium valuation and modest top-line progress, I’m in no rush to purchase Apple shares right now. I believe there are probably higher choices for my portfolio.