Buffett Admits Selling Apple Early, Can Apple Stock Price Still Rise? Need to Watch These Three Signals

TradingKey - Buffett admits that trimming his stake in Apple ( AAPL) was a bit premature. This remark caught the market's attention not just because the realized gains have exceeded $100 billion, but more importantly, because it highlights a more realistic issue—once a company becomes sufficiently successful and massive, the core of investing is no longer just about "being right," but rather "whether it can continue to earn the next round of profits." For Apple, this question is particularly critical.

Apple remains a top-tier asset, but "certainty" is replacing "growth."

Apple's own fundamentals have not weakened due to Buffett's divestment. The company's revenue for the first quarter of fiscal year 2026 reached $143.8 billion, a 16% year-over-year increase. Both iPhone and Services hit record highs, and the active installed base of devices continued to expand.

From a business model perspective, Apple has completed its transformation from a "hardware company" to an integrated "hardware + software + services" platform. Its earnings structure is more stable than in the past, and its resilience to economic cycles is stronger.

For a company already of this size, these results remain strong. However, the issue is that the market's pricing of Apple is no longer about "whether it is stable," but rather "whether it can grow even faster."

When a company's revenue scale approaches its ceiling, even continued growth struggles to surprise the market. Apple's current state is more like a highly efficient cash machine than a high-speed growth engine.

This is the underlying logic behind Buffett's reduction: it's not that the company has deteriorated, but rather that the "slope" of its growth has changed.

The core contradiction behind stock price performance: robust results, but a valuation that is not low.

Regarding the share price, Apple's recent performance has been somewhat volatile and hasn't continued to strengthen following its earnings report. The reason is simple: current valuations already reflect high expectations.

A comparison with peers makes this clearer:

Apple: Valuation is at a high level, with the market awarding a "stability + partial growth premium."

Microsoft: The AI narrative is the strongest here, but the stock has seen a significant correction recently due to excessive capital expenditures.

Alphabet: Driven by the dual engines of cloud and AI, its valuation is relatively lower, offering more room for recovery.

Samsung: More cyclical in nature, benefiting from AI chip demand but with significant volatility.

In other words, Apple is not the most expensive tech stock, but its risk-reward profile is being re-evaluated by the market. It lacks the clear AI monetization path of Microsoft, the valuation recovery elasticity of Alphabet, and the cyclical explosiveness of Samsung.

Consequently, the market's pricing has become a compromise: acknowledging its quality while remaining reluctant to easily push the premium higher.

AI is currently Apple's biggest variable and its greatest uncertainty.

If the core of Apple over the last decade was its "ecosystem loop," then the key to the next decade will likely be AI.

However, the problem is that Apple is not in a leading position in this round of the AI race.

Based on currently disclosed information, Apple is accelerating its competitiveness by optimizing Siri's capabilities and improving multi-tasking, while also considering the integration of third-party large language models (such as Gemini and Claude). At the same time, it is adjusting its internal AI teams and product cadence.

These moves indicate that Apple is aware of the issues, but they also reflect that its AI strategy is still in a "catch-up and integration" phase, rather than one of "dominance and output."

By contrast:

Microsoft has built a clear AI business loop through OpenAI

Alphabet is using Gemini to strengthen the synergy between search and cloud

Even Meta, is establishing influence with open-source models

Apple's advantage remains in its devices and ecosystem, but competition in the AI era is migrating toward "computing power + models + applications." This means that if Apple cannot deeply embed AI into its ecosystem, it will be difficult for its valuation logic to reach the next level.

Comparison with Samsung and Xiaomi: Apple's "stability" is also a limitation

In the hardware segment, Apple's main competitors are Samsung and Xiaomi, but their paths have clearly diverged:

Apple: High-end products + ecosystem lock-in for users, with the highest profit margins but relatively flat growth

Samsung: Spanning both chips and devices, it benefits from the AI hardware cycle but faces greater volatility

Xiaomi: Relying on cost-effectiveness and expansion into new businesses (such as electric vehicles) to increase market share

There is no absolute superiority among these three models, but their appeal to capital markets differs.

Apple's problem is that it has almost exhausted the potential of the high-end smartphone market. Remaining growth opportunities lie more in services and the ecosystem rather than sales surges. This makes it difficult for a single product cycle to drive a share price re-rating as it did in the past.

What Buffett's "selling too early" means for investors

Returning to the initial remark, when Buffett said he "sold too early," he wasn't expressing regret but rather emphasizing a more important point: even the best companies have an "optimal holding window."

For Apple, this window is shifting. In the past, Apple was a "low valuation + high growth" combination; now, it is closer to "high quality + mid-speed growth + mid-to-high valuation."

This means it remains suitable for long-term holding, but to achieve valuation expansion in the short term, it must rely on new variables—and that variable will most likely be AI.

Three key signals to watch moving forward

To determine whether Apple can enter its next growth cycle, focus on three key areas:

1. Whether AI products achieve real-world implementation rather than just incremental feature updates

2. Whether the services business can continue to accelerate, as this dictates the profit ceiling

3. Whether there are breakthroughs in new hardware or use cases, such as MR or AI-powered devices

If any of these signals are validated, Apple’s valuation logic could be unlocked; conversely, if these variables fail to materialize, Apple may remain in a "strong but stagnant" state.

Overall, Warren Buffett’s latest remarks have clarified the situation for Apple. It remains a company that can be held with confidence, but the difficulty of generating the next "$100 billion level" gain has clearly increased.