Is Apple Stock a Buy After Falling 14% From Its All-Time High?

Key Points
Apple's latest iPhone was a major hit.
Newer products could help boost sales growth.
Apple's expanding ecosystem presents it with significant opportunities.
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Towards the end of 2025, Apple (NASDAQ: AAPL) joined a highly exclusive group of corporations that have ever reached a $4 trillion market cap, hitting its all-time high in the process. The stock hasn't performed well and is down by about 14% since. Between persistent tariff threats and geopolitical tensions, many investors are choosing to take their money out of tech stocks -- and Apple hasn't escaped the sell-off. However, for investors looking beyond the ongoing volatility, there might be great reasons to consider the stock right now.
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Devices can still drive sales growth
Apple launched the iPhone 17 in September, and it has been a hit. The company was barely able to meet demand for the newest version of its most famous product when it first came out. The new iPhone has helped boost sales growth. In its latest quarter, Apple's year-over-year revenue growth was almost 16%, the highest it had been in over three years.
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Meanwhile, Apple has since made several new product announcements that could be game changers. Notably, the company is introducing its cheapest laptop ever, likely in a move to compete with other tech giants that dominate the more budget-friendly market (Apple has historically focused on the premium laptop market). Later this year, Apple will launch even more devices, including the iPhone 18.
While we don't yet have all the details, Apple also seems to be working on an iPhone Fold, once again, to compete with similar successful models marketed by its peers. Recent history suggests that Apple's device segment, which remains by far the biggest source of revenue, can still be a major growth driver, even as the iPhone no longer generates the excitement it once did.
Services are the future
Apple's growing installed base is helping boost revenue within its services segment, which has generally (though not always) grown faster in recent years. The company now has over 2.5 billion active devices, with paid accounts recently reaching an all-time high. New device launch could lead to even more devices in circulation for Apple and, eventually, more subscriptions. Apple should also add more services to its already vast arsenal, spanning fintech, music streaming, video streaming, health, and more.
Apple has plenty of exciting growth opportunities here, and over the long run, the higher-margin service segment will make up a larger share of the company's total sales, helping increase profits and margins. Now, some might complain that Apple's shares look a bit pricey at current levels. The company is trading at 28.8x forward earnings, versus an average of 20.9 for information technology stocks.
However, the company's deep moat from its brand name, network effects, and switching costs, combined with its significant free cash flow and massive growth opportunities, suggests the stock is worth a premium. That's why, after dropping 14% from its all-time high, Apple is a buy on the dip.
Should you buy stock in Apple right now?
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and is short shares of Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.