Apple Rises to All-Time Highs- But Here's Why Investors Should Hold Their Applause

Apple Inc. (NASDAQ: AAPL) is back in the news again. On October 20, 2025, its shares rose to an all-time high of $264.38 during the day, then closed at $262.43, bringing the company’s market capitalisation excitingly near to $4 trillion. This milestone is primarily due to strong early sales of the iPhone 17.

In addition, expectations for AI integrations has helped boost investor confidence. What we are seeing currently is a major turnaround from the stock’s earlier lows in 2025, when it was stuck in a downturn amid trade tensions and weak demand.

But in the midst of all the excitement, a different matter comes up. Therefore, the current peak might not be a launchpad but a risky place to be. Overvaluation, reliance on a single product line, regulatory challenges, and adverse economic conditions hint that premature celebration may result in disappointment.

Why I’m Skeptical About Apple Stock

The risk of a single product‐driven spike

The recent rise in Apple’s stock price is mostly due to the successful launch of the iPhone 17 series, which is reported to have sold around 14% more than the iPhone 16 in its first 10 days in the U.S. and China. Based on the most recent closing, the Apple stock price is trading at around $262, and that has brought the company to the precipice of hitting a market cap of $4 trillion. In this case, investors are essentially betting on continued strong success in a number of sectors.

Apple stock price has broken above the upper Bollinger Band and the RSI is near overbought conditions on the daily chart. Source: TradingView

Despite the strong debut by iPhone 17s, projections for the future may not be as clear. For example, Mizuho Securities recently lowered the ratings of suppliers like Skyworks Solutions and Qorvo. They estimate that iPhone shipments will fall by 7% in 2026 because of higher pricing, making people less likely to upgrade. In addition, Mizuho points to a likely sluggish uptake by the Chinese smartphone market.

Overvaluation Risk

At the time of this writing, Apple’s trailing P/E ratio is at 39.2, its forward P/E is 32.0, and its PEG ratio is 2.4. These numbers show that the stock is trading at a premium worth more than its expected growth. In a recent report, Morningstar analysts warned that Apple may be overvalued following its six-month upsurge. They urged investors to consider potential risk factors, such as the lack of clarity surrounding the actual revenue impact of AI.

In May 2025, Seeking Alpha published an article on how the company is facing risks from multiple directions. Some of the significant concerns are that it has not been innovative enough in recent years its R&D growth is modest. This has seen it fall behind competitors in the tech space like Nvidia or Meta.

Apple Still Lags in AI Innovation

Some analysts believe that Apple is behind the curve since its competitors, like Nvidia, Meta, Microsoft and Google, are rapidly integrating generative AI to all of their products. Many have been looking forward to the company’s “Apple Intelligence” suite of on-device AI features for a long time, but that is now only starting to materialise. The market is still waiting for the company to release ground-breaking new products in order to defend its premium price.

Some analysts have recently reported that the foldable iPhone, which people have been waiting for for a long time, may not come out until 2027. Meanwhile, Barchart commented that investors are taking a big risk by betting that a substantial Siri upgrade and new AI projects would be announced at the WWDC in June 2026. In the absence of a confirmation, Apple stock is trading based on a perception rather than a proven product cycle.

Geopolitical and Supply Chain Challenges

Furthermore, Apple stock price outlook is dampened by the company’s heavy dependence on China. China poses a substantial geopolitical risk to the company because it is both its principal production base and a crucial sales market.
Notably, Apple has strategically started to diversify its supply chain, which is an important move. A recent report by Morgan Stanley says that India currently accounts for more than half of the iPhones that are sent to the U.S. Still, it will probably take years to totally decouple or transition manufacturing in a meaningful way. Meanwhile, the Chinese market is getting more competitive, with strong local companies and a tough macroeconomic climate.

In Summary

Apple’s rise to record highs is incredible but it’s based on delicate ground that could give way under stress. As things stand, the stock seems more like a bubble than a bargain because of a perceived overvaluation. Also, a history of struggle against regulators and uncertain economic environment adds pressure. At this point, even a small miss on profits or a negative story on regulatory compliance might cause a significant, sudden drop in Apple stock price.

Why has Apple stock price risen in recent days?

The gains by Apple stock are primarily driven by a 14% jump in initial iPhone 17 sales relative to iPhone 16 and emerging AI optimism.

What external factors could impact Apple’s stock performance?

Key external risks include US-China trade tensions, supply-chain risks and weaker Chinese demand, which could pressure margins and earnings.

What major innovation lag is Apple stock facing?

Apple is viewed as lagging its peers in the generative AI race. In addition, the delay of the highly anticipated foldable iPhone until 2027 also pushes back a new revenue stream.