This company is involved in AI but has been slower to roll out its platform than certain peers — this may have limited gains in recent years.
The tech player has a long track record of growth and has benefited from its investments.
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In recent years, the artificial intelligence (AI) boom has driven tech stocks to major gains in market value, and today the Magnificent Seven tech stocks each boast a market cap of more than $1 trillion. Nvidia, the AI chip leader, this year took the top spot, surpassing all peers as it roared past $4 trillion.
But a trillion-dollar market value, alone, isn’t a reason to buy a stock. While it’s great that a company has seen investors pile into its stock and the price rise, this doesn’t necessarily mean that the momentum will continue. It’s important to consider other elements, such as what the company has accomplished over time and how that positions the player for the future.
With this in mind, is the following tech company — one of the largest by market cap — a stock to buy? Let’s find out.
Image source: Getty Images.
This particular company was the biggest by market value for years, though Microsoft later took the lead — and then this year, as mentioned, Nvidia rose to the top. The player I’m referring to is Apple(NASDAQ: AAPL) — and it recently climbed past Microsoft to take the No. 2 spot, research by The Motley Fool shows.
AAPL Market Cap data by YCharts
I probably don’t have to tell you that Apple makes one of the most popular smartphones in the world, the iPhone, as well as other leading products like the iPad and Mac. This portfolio has helped the company’s earnings advance over the years — and Apple’s return on invested capital shows that the company has deployed its cash wisely.
AAPL Return on Invested Capital (Annual) data by YCharts
Apple hasn’t been as big a player as other tech companies in the AI space, and that may have weighed on appetite for the stock in recent years. While some Magnificent Seven companies heavily invested in AI and launched products earlier during this AI boom, Apple took a slower approach. The company began rolling out its Apple Intelligence AI platform across its products last fall and has progressively released new features.
Apple also faced headwinds earlier this year amid concern that it would be one of the hardest hit by President Donald Trump’s import tariff plan due to its reliance on manufacturing in China — one of the countries most targeted by the tariffs. But Trump later proposed an exemption for tech players — like Apple — that also are building in the U.S. This clearly was good news for the company and has pushed the stock higher.
So, let’s return to our question: Is this trillion-dollar company a buy right now? The challenges I mentioned above no longer represent major risks for Apple — though the company still may not be viewed as a key AI leader. If, in the new year, investors continue to flock to AI stocks, Apple may remain in the background — investors might favor more aggressive AI players like Nvidia or Meta Platforms.
But, whether the investing theme of AI dominates or not, Apple still has what it takes to advance thanks to a strong product portfolio that continues to drive revenue higher. And one particular element actually could spark a new wave of growth — services revenue. It’s reached record levels quarter after quarter thanks to Apple’s massive fleet of active devices. The point here is that when Apple sells an iPhone, for example, the revenue opportunity isn’t over. Instead, this product may lead to recurring revenue as the user signs up for one or many of Apple’s services, from digital entertainment to cloud storage.
Meanwhile, Apple Intelligence, with more features to come in 2026, may even spark the attention of some investors looking to rotate out of 2025’s major AI winners into other AI stocks that haven’t yet advanced as much. Apple has climbed about 15% over the past year, while many tech players have skyrocketed.
Finally, regardless of Apple’s performance next year, the good news is the company has the potential, thanks to all of the positive points I mentioned above, to advance over time. And trading for 33x forward earnings estimates, the stock looks cheap right now. All of this makes Apple a fantastic stock to buy today and hold onto as it potentially enters a new phase of growth.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
This Tech Company is One of the Largest by Market Capitalization. But Is Its Stock a Buy? was originally published by The Motley Fool
