After a 4% Weekly Drop, Is Apple Stock Undervalued?

Key Stats for Apple Stock

• Past-Week Performance: -4%
• 52-week Range: $169 to $289
• Valuation Model Target Price: $321
• Implied Upside: 30.2% over 2.7 years

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What Happened?

Apple stock (AAPL) fell about 4% over the past week, after trading higher early before pulling back midweek, with shares finishing near $250 per share.

The decline was driven by profit-taking after a recent run-up, as shares approached the upper end of their recent range with no new company-specific catalyst to sustain momentum.

With no earnings release, guidance update, or material announcement during the week, short-term positioning unwound once buying interest stalled.

Apple has been viewed as one of the more resilient large-cap technology names due to its strong margins, recurring services revenue, and consistent cash generation, which supported buying interest earlier in the week.

However, with the stock trading near the upper end of its $169 to $289 52-week range and at elevated valuation levels, selling pressure picked up later in the week, pushing shares lower alongside other large-cap technology names experiencing similar positioning-driven pullbacks.

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Is Apple Undervalued?

Under valuation model assumptions, the stock is modeled using:

• Revenue Growth (CAGR): 7.4%
• Operating Margins: 32.7%
• Exit P/E Multiple: 29.3x

Based on these inputs, the model estimates a target price of $321, implying about 30.2% total upside from the recent share price over the next 2.7 years.

Over the next 12 months, results are likely driven by whether Apple can spark iPhone upgrade activity through AI-enabled features that meaningfully improve everyday use rather than incremental hardware updates.

Services remains a major earnings engine, with App Store monetization, subscriptions, and advertising efficiency supporting margins even if hardware unit growth stays modest.

Growth in the installed base continues to lift recurring revenue and customer lifetime value, reinforcing cash flow resilience.

Progress on Apple’s custom silicon roadmap supports performance efficiency and cost control, helping stabilize margins.

Ongoing share repurchases translate strong free cash flow into higher earnings per share, supporting returns if execution remains steady.

Taken together, the valuation model suggests Apple looks modestly undervalued, with upside driven by steady execution rather than aggressive growth or multiple expansion.

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