The company is lagging behind in artificial intelligence.
Apple stock is trading at an expensive price-to-earnings ratio.
10 Best Stocks Ours ›
apple(NASDAQ: AAPL) Has entered a rough patch. Smartphone and computer giants have fallen by about 10% over the past 12 months, while artificial intelligence (AI) stocks are soaring.
Management has made some major mistakes in virtual reality and false promises through its Siri and Apple Intelligence services. Revenue is growing slowly, and this legendary tech brand seems to lack innovation.
Is Apple in trouble? That's why investors should worry about owning a stake in the stock.
Image source: Getty Images.
Back in early 2024, Apple released the Vision Pro, which it promised is the next evolution of expensive virtual reality headsets in computing. The device is for $3500 and has a futuristic skiing look and is designed to replace personal computers for people working from home. Apple has been researching virtual and augmented reality technologies for years, but this is its first foray into the most advanced computing field.
Now, in June 2025, the Apple Vision Pro looks like it's a complete failure. The company has had to expand production due to weak demand, which has failed to attract developers to come up with applications for the device and has sold for less than one million devices since its launch (reportedly). Even if it sells 1 million of these devices each year, it would amount to $3.5 billion in annual revenue, while Apple's combined revenue is $400 billion. The device does not move the needle financially.
Vision Pro can be officially called failure. The new version may change consumer sentiment, but Apple failed in its first foray into virtual reality. The company is still powered by iPhone and iPhone software and services.
Speaking of smartphones, Apple has assured customers and investors that new AI-centric updates will soon appear on Apple devices. Bullish investors think this is the reason customers upgrade their iPhones, which has been an incredible problem for the company as customers stick with older devices for longer.
Like Vision Pro, Apple plays big games around Siri and Apple Intelligence products. However, the actual product released is boring.
At its annual developer conference, the company delayed the launch of AI Siri until early next year. Meanwhile, AI competitors, e.g. letter And Openai, is moving forward using cutting-edge productivity tools, putting Apple in dust.
Apple does have some power in relationships, which will help put these AI tools on its devices, but it looks like it misses the ship on AI, just as it misses the ship on cloud computing. That's why Apple's revenue has hardly grown in the past few years, while other technology leaders, such as Alphabet, are constantly increasing their heights.
Apple's business is still related to the iPhone and its related software services. There will be some time.
YCHARTS' AAPL price ratio (P/E) data.
This is not to say that Apple reflects this stagnant growth at a cheap revenue ratio. Apple has a price-to-earnings ratio (P/E) of 31, while Alphabet's price is less than 20. This puts Apple stock at the moment with additional risks. If revenue growth does not accelerate, Apple will have disappointing stocks in the coming years.
In the coming years, some words may put Apple's revenue into negative territory. High profit fees on its App Store sales are under threat because U.S. courts ruled that alternative payment methods must be allowed. The huge fee you get from Google searches every year is the default search engine on Apple devices, and is currently decided by the court that may be anti-competitive. The judgment on Apple could mean that the default payment lost more than $20 billion in high-profit revenue each year.
Risks are piled up, innovation is stagnating, and its P/E ratio is very high. So, as companies may be in trouble, investors may not be able to find anything about Apple's stock. Avoid buying for your portfolio now.
Before you buy Apple stock, consider the following:
this Motley Fool Stock Advisor The analyst team just confirmed what they think is 10 Best Stocks Investors buy now…and Apple is not one of them. Ten stocks with layoffs could generate monster returns in the coming years.
When to considerNetflixOn this list on December 17, 2004…If you invested $1,000 when you suggested,You will have $659,171! * Or when NvidiaThis list was listed on April 15, 2005…If you invested $1,000 when you suggested,You will have $891,722! *
Now, it's worth notingStock ConsultantThe overall average return is995% – Compared to market sprints172%For the S&P 500 index. Don't miss the latest top ten list, available when you joinStock Consultant.
View 10 stocks »
*Stock consultant returns as of June 9, 2025
Alphabet executive Suzanne Frey is a member of the board of directors of Motley Fool. Brett Schafer has posts in the alphabet. Motley fool has a place and recommends letters and apples. Motley Fool has a disclosure policy.
Is Apple's inventory in trouble? Originally published by Motley Fool
