Should Investors Buy and Hold Apple (AAPL) in 2026?

Apple Inc. (AAPL) has long been a cornerstone of the global technology sector, but as 2026 approaches, investors face a critical question: Is the stock still a compelling buy-and-hold opportunity? To answer this, we must dissect Apple's earnings momentum, revenue growth, and valuation trends, weighing its strengths against potential risks.

Earnings Momentum and Revenue Growth: A Mixed Picture

Apple's Q4 2025 results underscored its resilience and adaptability. The company reported record revenue of $102.5 billion, an 8% year-over-year increase, driven by robust performance across hardware and services according to Apple's official statement. The iPhone segment, despite supply constraints for several iPhone 17 models, generated $49.03 billion in revenue-a 6% rise-highlighting the enduring demand for its flagship product as reported by CNBC. Meanwhile, the Mac business outperformed expectations, with a 13% revenue jump to $8.72 billion, fueled by the popularity of the MacBook Air and the M5 chip during the earnings call.

However, the most striking development was the Services segment, which achieved a 15% year-over-year growth to $28.8 billion, surpassing the iPhone as Apple's largest gross profit contributor according to Leverage Shares analysis. This shift signals a strategic pivot toward recurring revenue streams, a critical advantage in an era of economic uncertainty. Yet, the company's ability to absorb $1.1 billion in tariff-related costs during the quarter-and its projection of $1.4 billion in additional costs in the December quarter-raises concerns about margin pressures as detailed in CNBC's report.

Valuation Trends: Expensive, but Justified?

Apple's valuation metrics paint a nuanced picture. As of 2026, the stock trades at a trailing price-to-earnings (P/E) ratio of 36.57 and a forward P/E of 33.07 according to Full Ratio data. These figures exceed the Global Tech industry average of 22.8x and the technology sector peer average of 33.6x according to Full Ratio data, suggesting Apple is priced at a premium. The PEG ratio, which adjusts for growth expectations, stands at 3.20, well above 1 and indicating that the stock is expensive relative to its projected earnings growth according to Full Ratio analysis. Analysts project this ratio to average 3.34 over the next five years, reinforcing the notion that investors are paying a premium for future potential rather than current performance according to Full Ratio data.

Apple's price-to-sales (P/S) ratio of 9.83 and price-to-book (P/B) ratio of 54.85 further highlight its elevated valuation according to Full Ratio data. While these metrics suggest the stock is overvalued compared to revenue and asset bases, they also reflect investor confidence in Apple's brand strength, ecosystem, and innovation pipeline. Notably, Apple's P/E ratio is slightly below its estimated fair value of 38.2x, hinting that the stock may still offer some margin of safety for long-term holders according to Full Ratio analysis.

The Case for Buy-and-Hold: Strategic Strengths and Risks

Apple's dominance in the tech sector is underpinned by its ecosystem-driven business model, which fosters customer loyalty and cross-selling opportunities. The Services segment's growth, in particular, provides a stable, recurring revenue stream that mitigates risks associated with hardware cyclicality. Additionally, the company's R&D investments-such as the M5 chip and AI advancements-position it to capitalize on emerging trends according to Leverage Shares analysis.

However, the valuation premium demands scrutiny. A PEG ratio above 1 implies that Apple's growth must outpace its valuation for the stock to justify its price. If the company fails to deliver on innovation or faces regulatory headwinds (e.g., antitrust actions or data privacy laws), the premium could contract. Moreover, the ongoing tariff costs and global supply chain challenges could erode margins, particularly if economic conditions deteriorate.

Conclusion: A Cautious "Yes" for Long-Term Investors

For investors with a long-term horizon, Apple remains a compelling buy-and-hold candidate. Its diversified revenue streams, ecosystem dominance, and innovation pipeline provide a strong foundation for sustained growth. While the valuation appears stretched, the company's ability to generate free cash flow and reinvest in high-margin services (e.g., Apple Music, iCloud) could justify the premium over time. That said, investors should monitor macroeconomic risks and ensure that Apple's growth trajectory aligns with its valuation. In 2026, Apple is not a bargain, but for those who prioritize quality and resilience, it remains a cornerstone of a well-diversified portfolio.