Apple Looks Overvalued

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Apple Looks Overvalued

Apple (Aapl) Looks Overvalued

The performance of Apple (AAPL) in the first half of 2025 isn't that great at all. But the underlying business of Apple (AAPL) is still very solid.

So, does this mean Apple can make a comeback during the 2nd half of 2025? To answer this, we must try to understand the fundamental situation of Apple first.

Apple (Aapl) Trades In Red

Apple (AAPL) has made a lot of money for investors over the last few decades. A classic example is Berkshire Hathaway, which has made billions in profits by investing in Apple (AAPL).

However, the stock price of Apple (AAPL) is down by 17% since the year 2025. In addition, Buffett has also sold a major portion of Apple (AAPL) holdings in the last few years.

Does this mean the current share price of Apple (AAPL) is not the ideal spot to buy right now? From Buffett's perspective, it does seem like that as he is selling his stake in Apple.

If we look at the business of Apple, it remains solid as they have a very loyal customer base. To put things into perspective, Apple (AAPL) earns $892,000 in net profit every 5 minutes.

So, if the business of Apple (AAPL) is so good, why is Buffett selling? It seems the one key reason is how expensive the Apple (AAPL) shares have become.

In the last 5 years, the Apple (AAPL) stock price has increased by almost 18%. In addition, the P/E ratio of Apple (AAPL) is 32, which makes it expensive.

Also, the data from last year showed an increase in the net income. That marks the 2nd year in a row of weak performance and isn't good news for Apple (AAPL).

So, based on all the data and the current share price, Apple (AAPL) looks overvalued and expensive. However, once the price declines to a more comfortable level, the P/E ratio will also become more attractive.

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