3 Stocks I'd Rather Own Than Apple With a CEO Shakeup

If you haven't heard the news, Apple (NASDAQ: AAPL) is getting a new CEO. On Sept. 1, Tim Cook will step down, and John Ternus will assume the CEO role. While this has been signaled for a while, it'll still be a big deal when it occurs, because Apple has had very few people fill the CEO seat.

Leadership transitions can be difficult. Apple's identity under Cook was different from what it was under Steve Jobs. Investors have some clues about the type of company Apple will be under Ternus' leadership (he comes from a hardware background, more similar to Steve Jobs), but until he's led the company for a few years, it will be difficult to judge whether Apple will be worth investing in.

Furthermore, Apple has a few things going on that make me a bit uncertain about investing in it in general, and make me want to pivot to other businesses with well-established futures instead.

Image source: Getty Images.

Apple has a premium valuation

Although Apple's latest quarters have been a step in the right direction, Apple has produced lackluster growth for the better part of four years. Despite this, the stock trades at a premium to its peers.

Data by YCharts.

At 34 times earnings, it is at the higher end of its valuation range over the past five years. It's also not much higher than its forward price-to-earnings (PE) ratio, which suggests Wall Street doesn't expect much growth over the next year. Compared with other big tech peers, Apple has a far higher premium without the growth to show for it.

This means it's trading on past execution and its name, which were attributes earned under Cook. With Ternus taking over later this year, Apple may not get the same premium for the market, which could cause its valuation to tumble at the first sign of struggle.

Instead of Apple, I'd much rather own some other stocks.

These three companies are growing rapidly thanks to AI

One area where Apple has underwhelmed investors is artificial intelligence (AI). AI is one of the biggest tech revolutions the market has ever seen, and it will have an effect akin to that of the internet. Apple's AI strategy so far has left it behind the competition, so I think looking at AI stocks makes a ton of sense.

The most obvious one is Nvidia (NASDAQ: NVDA). Nvidia makes graphics processing units (GPUs), which are the primary computing units used to train and run AI models. Nvidia is growing rapidly, despite its already massive size. In the current quarter (Q1 of fiscal 2027), Wall Street analysts expect 79% year-over-year growth. In the fiscal second quarter, they expect 85%. That showcases the incredible power of AI, and with Nvidia priced at 26 times forward earnings, it's actually cheaper than Apple.

Two other companies that are often compared to Apple are Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). I think both of these companies are better stock picks, mainly because of their valuations. While Nvidia is in a class of its own in terms of growth, these three are closer comparisons.

Data by YCharts.

Apple holds a premium on both of these, despite not yet having a clear path to grow from AI. Both Alphabet and Microsoft have massive cloud computing businesses driven by incredible growth thanks to AI demand, and both companies' stock prices will keep pushing higher over the next few years.

I'd rather own all three of these stocks over Apple until we know what Apple's direction is under Ternus. If he comes in and takes an AI-first approach, then Apple may earn its current valuation. But if it doesn't and the company slips up, the fall could be hard, because Apple has a premium valuation and must maintain perfect execution. Maintaining flawless execution under a leadership transition isn't easy, so I think it's best to find some other stocks to invest in right now.

Keithen Drury has positions in Alphabet, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.