Key Moments
- Melius Research called Apple’s ascent to a $5 trillion market value the “most disliked rally in history” while maintaining a positive outlook.
- Apple shares trade at 36 times next-12-month EPS and are up 26% year to date, outpacing Amazon, Alphabet, Meta, Tesla and Nvidia.
- Melius reiterated its Buy rating and $370 price target on AAPL and sees further upside potential after earnings on Nov. 2.
Market Rally Viewed Skeptically by Hedge Funds
Investing.com – Melius Research characterized Apple Inc.’s (NASDAQ:AAPL) climb to a $5 trillion market capitalization as the “most disliked rally in history,” even as the firm argued that the move still has room to extend.
In a client note, analyst Ben Reitzes said hedge funds have pointed to rising memory costs, challenges in the Services segment and an elevated valuation as primary reasons for their caution.
Valuation, Performance and AI Positioning
Despite those concerns, Melius noted that Apple currently trades at 36 times next-12-month earnings per share and has gained 26% year to date, beating the performance of Amazon, Alphabet, Meta, Tesla and Nvidia over the same period.
“Apple’s 2026 performance is the poster child for how the market is rewarding a capex-lite approach that is AI-model agnostic,” Reitzes wrote.
| Metric | Detail |
|---|---|
| Market value characterization | Run to $5 trillion called “most disliked rally in history” |
| Forward valuation | 36x next-12-month EPS |
| Year-to-date stock performance | Up 26% |
| Rating | Buy (reiterated) |
| Price target | $370 |
Rating, Target and Earnings Catalysts
Melius reaffirmed its Buy rating on AAPL and kept its $370 price target, stating that it sees scope for that target to move higher following Apple’s earnings report on Nov. 2.
The firm said it anticipates upside to current projections, driven by durable average selling price increases and favorable product mix dynamics, along with multiple avenues for Services growth to reaccelerate.
Product Roadmap Under New Leadership
Reitzes emphasized the initiatives of new CEO John Ternus, who is seeking to speed up product development and expand the company’s hardware lineup.
“Apple needs more shots on goal to move the needle on a $480B revenue base and increase a massive 2.5B+ unit installed base that needs to seed Services growth,” he said.
Melius pointed to several potential future offerings, including a HomeView device with a robotic arm in 2027, camera-enabled AirPods and a redesigned iPhone tied to the device’s 20th anniversary. The firm also expects an uptick in smaller, tuck-in acquisitions overseen by new M&A chief Steve Smith.
“Anti-AI” Perception and Hardware Validation
The report said Apple is currently benefiting from being perceived as an “anti-AI play,” supported by its significant share repurchase capacity and hardware that can run AI applications from any model.
Reitzes noted that Meta’s move to optimize Muse Spark Open for Apple silicon serves as confirmation of the strength of Apple’s hardware architecture.
“In short, Apple could remain a good place to hide for a bit longer,” the analyst wrote.
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