Apple Inc (AAPL)

Apple is the second-largest holding in most index funds and one of the few companies where the standard balance sheet ratios mislead badly. This page covers the moat, the buyback distortion, and what to check before valuing it.

The business

Apple sells hardware, but the investment case has for years rested on Services — the App Store, iCloud, payments and advertising revenue that arrives at far higher margins than devices and recurs without a new product launch. Services growth is the number that moves the valuation, because it converts a replacement-cycle business into something closer to a subscription one.

The moat

The moat is switching cost dressed as brand. Photos, messages, purchases, watch pairing and password storage all live inside the ecosystem, and moving out costs time rather than money — which is a more durable lock than price. Assess it by watching whether Services revenue keeps growing when device sales are flat, since that is the test of whether the ecosystem holds people independently of the hardware cycle.

What to check before you value it

• Debt-to-equity will look alarming — Years of buybacks have shrunk the equity base, so the ratio reads far worse than the balance sheet actually is. Look at net cash and interest cover instead.
• Services as a share of profit — Not revenue. Services carries a much higher margin, so its contribution to profit is larger than its revenue share suggests.
• Regulatory exposure — App Store commission rates and default search payments are both under regulatory pressure in multiple jurisdictions, and both are high-margin.
• China — Both a major market and a manufacturing concentration. Worth sizing as a single risk rather than two.

How much of it you already own

Apple is around 7.1% of the Vanguard S&P 500 UCITS ETF as at July 2026, the second-largest holding. Together with NVIDIA that is roughly 15% of the index in two companies. See what is inside an ETF.

Recent filings

The $110bn authorisation was the largest in the company’s history, and the quarterly dividend rose 5% alongside it. Services growing 22% against iPhone at 18% is the line that matters for the valuation: it is the ecosystem thesis showing up in the accounts rather than in a keynote.

How Oak Growth scores it

Oak Growth runs Apple through the same four pillars as every other company it covers — moat, management, economics and value — and publishes a discounted cash flow intrinsic value alongside the margin of safety against the current price. Because those figures move with the market and with each set of results, they live in the app rather than on this page. See the 4-pillar method →

Common questions

Is Apple Inc undervalued?

That depends on the price on the day you ask. Oak Growth publishes a discounted cash flow intrinsic value for Apple Inc and the resulting margin of safety, updated from live market data rather than a fixed figure. The checks that decide it are set out on this page.

Does Apple Inc have an economic moat?

Yes. The durable part is switching cost rather than brand — photos, messages, purchases and device pairing all live inside the ecosystem, and leaving costs time rather than money. The test is whether Services revenue keeps growing when device sales are flat.

Is AAPL in index funds and ETFs?

Yes. Apple was roughly 7.1% of the Vanguard S&P 500 UCITS ETF as at July 2026, the second-largest constituent, so index fund holders already own a large position.

How do you value Apple Inc?

Value Apple on free cash flow rather than book-based measures, because years of buybacks have shrunk the equity base and distort every ratio built on it. Separate the Services stream, which is higher margin and more recurring, from the hardware replacement cycle.

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