I keep buying Apple (NASDAQ:AAPL | AAPL Price Prediction), and I stopped apologizing for it a long time ago. Every paycheck cycle, every dip, every quarter I look at the same file and reach the same conclusion: this is where my money keeps going, and I am not close to done.
The pull is simple. Apple has 2.5 billion active devices in the wild, and every one of them is a paying user Apple already acquired. In consumer tech, that is the hard part. iMessage, Apple Watch, AirPods, AirTags, and iCloud stitch those devices into one hostile-to-leave experience. When switching out means losing your photo library, your family group chats, your health data, and the AirPods that pair in one tap, you upgrade instead of switching. That friction is the mousetrap, and it hands Tim Cook quiet pricing power on both hardware tiers and digital services.
The Receipts
That moat shows up in the numbers. Services hit $30.98 billion in Q2 FY26, another all-time record after $30.01 billion the quarter before. That is the highest-margin, most recurring revenue Apple has, and it compounds because the installed base compounds. March quarter revenue came in at $111.18 billion, up 16.6% YoY, with EPS of $2.01 against a $1.94 consensus. That was the eighth consecutive EPS beat, and the wider streak now sits at nine quarters with zero misses.
Then there is the cash machine. Fiscal 2025 threw off $111.48 billion in operating cash. Apple ran $90.71 billion in buybacks that year, lifted the dividend 4% to $0.27 a share this spring, and the board reloaded with a fresh $100 billion repurchase authorization. Return on equity sits at 171.4%. That is what a perfect mousetrap looks like on a spreadsheet.
Why Not NVIDIA
The obvious alternative for a mega-cap tech buy right now is NVIDIA (NASDAQ:NVDA). I own some, but my incremental dollar goes to Apple. In July, Apple surpassed Nvidia in market value, reclaiming its spot as the world’s most valuable company. NVIDIA is a fabulous cyclical, hitched to hyperscaler capex plans that can turn on a dime. Apple is 2.5 billion consumer relationships paying every month for storage, music, TV, and payments. I want more of the annuity and less of the boom-bust.
The Risk I Will Not Wave Away
The real risk is China plus regulation. Greater China revenue dipped to $14.49 billion in Q4 FY25 before rebounding to $25.53 billion in Q1 FY26. Trade disputes, tariffs, and the Apple lawsuit against OpenAI over alleged trade secret theft all sit on the risk page of the 10-K. None of that has broken the ecosystem thesis. A user who bought an iPhone 17 and a pair of AirPods Pro 3 this year is staying, headlines or no headlines.
At $321.66, Apple trades at a forward P/E of 34. The multiple is rich, and I pay it willingly. Durability is what I am buying, and the 50.8% one-year and 1,351.65% ten-year returns tell me the trap keeps catching mice. I will keep hitting the buy button until the installed base stops growing, and nothing in the data says it will.
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