- Apple shares climbed nearly 1% on Friday, reaching an intraday record of $360.80 and lifting the company’s market value above $5.2 trillion, CNBC reported, as investors sought a haven from the AI sell-off. Bernstein analysts led by Mark Newman reiterated an outperform rating and a $380 price target, implying about 7% upside from Thursday’s close, and described Apple as the “Costco of tech.”
- “With little correlation to tech peers, Apple now trades in line with high quality consumer stocks,” the Thursday note said, according to CNBC. Unlike other Magnificent Seven companies spending hundreds of billions of dollars on capital expenditures, Apple’s capex is less than 2% of revenue. The stock’s price-to-earnings multiple has been sent to all-time highs by the AI rotation, Bernstein said, and the firm argued the market has “reclassified Apple to a consumer compounder.”
- Apple currently trades at 37 times expected 2027 earnings, roughly twice the market’s forward earnings multiple, CNBC reported. Among companies with a market capitalization above $200 billion and consensus future EPS growth below 15%, only four exceed a forward P/E of 30: Costco at 46 times, Walmart at 39 times, Apple at 37 times and General Electric at 36 times, according to Bernstein. Apple’s expected annual revenue growth through 2029 is roughly 9%, faster than Costco’s 7% and Walmart’s 5%.
- The firm also pointed to cash returns. With an estimated 3.1% free-cash-flow yield and buybacks equal to 3% of market capitalization in 2027 and 3.2% in 2028, Apple is expected to return almost all of its free cash flow to shareholders through buybacks and dividends. Bernstein’s smartphone survey found that 90% of iPhone users stayed with the brand when replacing a device, matching Costco’s worldwide membership renewal rate of about 90%. CNBC noted that Apple has had a strong run even after John Ternus succeeded Tim Cook as CEO, and even as it faced rising memory costs and narrower margins.
What Happened?
Friday’s record arrived in the same session that Nvidia closed below a $4 trillion market cap and a host of AI-infrastructure stocks fell sharply. That is the rotation Bernstein is describing: investors are paying a consumer-staples multiple for a company whose capex burden is a fraction of its AI-spending peers and whose replacement cycle looks, in the firm’s telling, as sticky as a warehouse-club membership. The 37-times forward multiple is rich against the broader market, but it still sits below Costco and Walmart on that Bernstein screen, and Apple’s 9% expected revenue growth is faster than either retailer.
Why It Matters?
The comparison is also a warning. If Apple now trades like a consumer compounder, it can keep rising as a safe haven, or it can be punished like a high-multiple staple if iPhone demand or margins disappoint. Rising memory costs and narrower margins, which CNBC said Apple is already facing, are the obvious fundamental risks behind the multiple. Bernstein’s keep-buying stance assumes those pressures do not break the 90% loyalty or the buyback machine.
What’s Next?
Investors will watch whether Friday’s record holds into next week, when Nvidia’s earnings and Anthropic’s IPO will again test appetite for AI-exposed tech, and whether Apple’s multiple keeps expanding if that volatility continues. The $380 target implies limited upside from the new highs, so further gains would require Bernstein or other firms to raise targets. Memory-cost commentary and any update on margins will be the fundamental checks on the “Costco of tech” thesis.
