Am I the Only One Worried That Apple Hasn't Earned Its Recent Upticks?

It was a week to remember for Apple (NASDAQ: AAPL) and its investors. The consumer tech tastemaker hit an all-time intraday high in each of the week's five trading days. It's not alone. A lot of companies are racing to hit fresh high-water marks in the current bullish climate.

Apple investors have been treated to a 64% gain since bottoming out in April, but it's also not alone on that front. Most stocks -- and tech stocks in particular -- have been soaring the since the initial tariff-related sell-off nearly seven months ago. Most of the other "Magnificent Seven" stocks have actually moved even higher since April.

Near the end of last week's run of daily intraday highs, Apple also posted well-received quarterly results. It was a modest beat, and near-term guidance was promising. However, many of the same questions that plagued Apple earlier this year remain. The stock is just trading a lot higher, and it leaves me wondering if the class act of Cupertino is worthy of its upticks.

Image source: Getty Images.

Taking a bite out of the Apple

As an investor in Apple, I realize that it may seem hypocritical to be calling out a stock's bounce that has benefited me financially. It's like looking a gift iPad in the USB-C connector port. I've owned Apple long enough for it to be an 11-bagger, even though I have pared back my position as Apple's growth has slowed.

Allow me to zoom out before zooming back in. Let's go back over the past 21 years of Apple's stunning growth trajectory. Apple rattled off nine consecutive years of healthy double-digit revenue growth starting in 2004. Strong iPod and Mac sales erupted when the iPhone was introduced three years into that run. Apple then settled into a predictable routine a year after Steve Jobs left us in 2011. Every year of double-digit top-line revenue growth was followed by positive or negative single-digit moves in back-to-back years before a more evolutionary iPhone model would come out and raise the bar again.

Here's how its net sales have played out over the past few fiscal years since Steve Jobs left us in 2011.

• 2012: 45%
• 2013: 9%
• 2014: 7%
• 2015: 28%
• 2016: -8%
• 2017: 6%
• 2018: 16%
• 2019: -2%
• 2020: 6%
• 2021: 33%
• 2022: 8%
• 2023: -3%
• 2024: 2%
• 2025: 6%

The same quarterly report that had the market gushing last week -- with at least 16 analysts jacking up their price targets after Thursday afternoon's update -- was just the last frame in Apple's fourth straight year of failing to top 8% in top-line growth. Am I the only one scratching my head in a sea of confetti cannons for a company that has a compound annual revenue growth rate of 1.8% over the past three years?

Apple core competencies

Apple's iPhone 17 rolled out two weeks before the fiscal fourth quarter came to a close. Reviews have been favorable and Apple is understandably gushing about the product, but phone sales for the quarter rose a modest 6% in Thursday's report. Its iPad and wearable segments were flat. It was strength for Macs and services that helped lift overall net sales 7.8% higher, a sequential slowdown from the fiscal third quarter before the iPhone 17 had come out.

The tech stock's outlook holds promise. Apple is eyeing 10% to 12% revenue growth for the new fiscal first quarter, fueled by double-digit growth for its iPhone business. This is a pretty big deal. It would be Apple's first quarter of double-digit growth in four years. But where does that leave us?

If Apple is able to sustain double-digit growth for the entire fiscal year, will it be another four-year drought after that? Are we just going to overlook Apple's inability to innovate in a room that it can no longer read? I'm looking at you, Apple Vision Pro with your incredulous price tag.

Have you seen the new "Vanilla" ad for Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Pixel 10? It takes a few clever jabs at Apple. A montage of scenes shows people treating a vanilla ice cream cone as an iPhone. The first jab is that the iPhone is vanilla. One clip shows a billboard sign being updated. The text goes from "Vanilla Pro" to "All New Vanilla Pro" but the phone doesn't change. The final jab comes when someone with a Pixel 10 is trying to decide on the optimal floral arrangement as a Vanilla Pro owner enviously watches.

"Gemini, which of these would be a little less expected," she asks, a shot at Apple's inability to catch up with Android in smartphone artificial intelligence (AI) integration.

Wall Street pros don't see a breakthrough, even after what should be a robust holiday quarter for Apple. They see revenue continuing on a single-digit revenue growth path in fiscal 2026 and 2027, a six-year slump of vanilla bean for the bean counters. Meanwhile, Apple's ascending price finds the stock selling for 33 times forward earnings. Until Apple fires back with sustainable growth or a new flavor of innovation, these confetti launchers of upticks seem to be little more than smoke.

Rick Munarriz has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.