THE BULL CASE FOR APPLE
Wall Street has basically given up on Apple. — The stock has tanked more than 40% from a peak of $702 last September to a new low of about ~$406 this morning. — The stock is also now trading at a price/earnings ratio of 9X. — That P/E ratio is well below the market average, which is about 15X.
Context & Ripple Effects
This is the contrarian turn in a slide that has run for months: after losing $34.9 billion in market cap in its worst trading day in four years last December and hitting another new low in early March, Apple now trades at roughly $406 — down more than 40% from its $702 September peak — at a P/E of about 9X against a market average near 15X.
Business Insider's bull case lands the same week the New York Times chronicles the bruising fall itself, and the story has traveled unusually far for a valuation argument — picked up by MoneyBeat ('Dirt Cheap; So What?'), Daring Fireball, TechCrunch, TheStreet and Motley Fool — because it forces the question of whether Wall Street is pricing Apple as a broken growth story or a mispriced cash machine.
First-order effects
- Value-oriented investors get their strongest entry argument since the 2008 drop below $90: a 9X multiple on the most valuable company in the market, while momentum holders who drove the stock to $702 are the ones capitulating at the lows.
Second-order effects
- A stock this cheap raises pressure on Apple management to defend the multiple — through capital returns, new product catalysts, or guidance — rather than let the discount deepen; every earnings report now doubles as a referendum on whether the bear case or the bull case is right.
Third-order effects
- If the pattern holds, the market is re-rating Apple from hyper-growth tech to mature-hardware economics, which would structurally cap its multiple regardless of profitability — the same debate Felix Salmon framed back in the 2011 valuation chart.
The trend: Apple is being repriced by Wall Street from an unstoppable growth compounder into a discounted mature business, with the valuation debate itself becoming the dominant narrative around the company.