This is one outlet's own report from Fortune — the article as it was filed.
AIPROPX ReportFortune · 2h ago
Apple shows that AI winners don’t have to build the biggest models
Good morning. Apple briefly crossed $5 trillion in market value this week—and how it got there should matter to finance professionals.
Fortune’s Shawn Tully reports that Apple briefly reached the milestone on Tuesday, becoming only the second company in history to hit the $5 trillion mark, less than a year after first surpassing $4 trillion. Its shares are up nearly 60% over the past 12 months, driven by a combination of strong iPhone demand, continued services growth, and a market that’s increasingly rewarding durable cash flows over capital-intensive AI investments.
Tully examines what this milestone says about how investors are repricing mega-cap tech and why Apple’s cash-generation engine and massive buyback program continue to command a premium. His analysis also explores the growing concentration risk as market indices become even more heavily weighted toward a handful of giants, the durability of Apple’s margin profile, and how buybacks at this scale influence long-term valuation. Read Tully’s full analysis for his assessment of whether Apple can reclaim—and sustain—a $5 trillion valuation.
On Thursday, Apple reported fiscal Q3 2026 revenue of $109.4 billion, up 16% year-over-year, a June quarter revenue record, and EPS of $2.02, up 29% year-over-year and beating Wall Street estimates. “We saw strong performance around the world with double-digit growth in every geographic segment despite supply constraints,” CFO Kevan Parekh said on the earnings call.
The company said it is facing severe supply constraints that will affect sales of iPhones and Macs in the months ahead. Shares dropped roughly 7% in after-hours trading following the earnings results, before regaining some ground, with the stock later trading down roughly 6% from its closing price of $333.85, Fortune reported .
Although Apple has been slower than its peers to roll out AI and has struggled to develop competitive in-house models, investors have increasingly viewed that as a strategic advantage. Unlike Meta , Google, Microsoft , and Amazon , Apple has largely avoided the AI infrastructure spending race that has driven a surge in capital expenditures.
Instead, some investors see Apple as being well-positioned to monetize AI adoption through its devices, software, and services ecosystem without bearing the same infrastructure costs. “As we move forward, we’re going to be looking for companies that monetize the consumption of AI, and Apple absolutely wants to be that company,” Joe Tigay, portfolio manager at Rational Equity Armor Fund, said in an email to CFO Daily.
It was also Tim Cook’s final earnings call as CEO. Incoming chief executive John Ternus will take the helm on Sept. 1, with Cook moving into the role of executive chairman. “We have a bright future ahead, and I truly have never been more optimistic,” Cook said. Have a good weekend. Sheryl Estrada [email protected]
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