I Think Apple is Getting Re-Rated to $400 So I’m Buying Again and Again
Apple just delivered its strongest June quarter ever, and one investor sees a clear path to $400 that gets easier to defend with every earnings report. Here is what the numbers reveal that Wall Street might still be underpricing.
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I keep hitting the buy button on Apple (NASDAQ:AAPL | AAPL Price Prediction) because the math on a re-rating toward $400 keeps getting easier to defend, and every quarter Tim Cook hands me another reason to add. Shares closed at $319.97 on September 4, 2026, up 33.94% over the past year, and I am still adding.
Why I Keep Coming Back to the Same Ticker
My thesis is simple. Apple runs a dual-engine business where a $54 billion hardware quarter now travels with a services annuity that keeps setting records, and management is retiring the share count fast enough to lift per-share earnings even in a flat quarter. That combination is what I keep paying for.
The Q3 FY26 report backs it up. Revenue landed at $109.42B, up 16.36% YoY, EPS came in at $2.02 vs $1.89 consensus, and that was the 9th straight EPS beat. iPhone revenue was $54.25B against $44.58B a year prior, and Services printed $30.74B. Cook called it “our strongest June quarter ever”, and this time the superlative fit.
Three Receipts That Keep Me Adding
First, the Services engine. A 75.6% Services gross margin on $30.74B of quarterly revenue is a software business hiding inside a hardware wrapper, and paid subscriptions surpassed 1.5 billion. That is recurring income that compounds.
Second, the capital return program is doing the heavy lifting on per-share math. The board authorized a new $100 billion buyback and a 4% dividend increase in Q2 FY26. Apple has already repurchased $62.094B in the first nine months of FY26, on top of $90.711B in FY25 buybacks. The quarterly dividend sits at $0.27.
Third, the installed base of 2.5 billion+ active devices is the moat. Return on equity of 171.42% and return on invested capital of 53.35% tell you what that base does to profitability.
Path to $400 Written in the Estimates
Analysts now model $9.5329 in FY27 EPS across 39 analysts. Our internal five-year base case models a final price of $508.47, with a bull case of $518.38 and a bear case ending at $358.68. That is the asymmetry I want in a core retirement holding.
Risk I Will Not Wave Away
Q3 gross margin got a one-time lift from tariff refunds worth roughly two percentage points and 11 cents of EPS. Strip that out and next year’s comparisons get harder. Memory pricing is what Cook flagged as “a 100-year flood on the memory pricing with exponential increases in memory prices”. Valuation is rich too, with a P/FCF of 47 and a yield of only 0.33%.
My thesis holds. Apple guided September-quarter revenue growth of 9% to 11% even with a 2.5 percentage point FX headwind, and iPhone and Mac demand is running so hot that Cook called the supply crunch “a demand forecast issue”. That is the problem I want a company I own to have.
Why the Buy Button Stays Active
Services keep compounding, the buyback keeps shrinking the float, the installed base keeps feeding both. When a business earns $29.79B in a quarter and hands back $33 billion to shareholders, patience is the only edge I need. I plan to keep accumulating until $400 stops looking like a floor.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
