Apple Inc.

Section 1: Company Overview, Shariah Compliance Standards and Fundamentals 

Section 1.1: Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software platforms include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Its services include advertising, AppleCare, cloud services, digital content and payment services. 

Kalkine’s ‘The Shariah Compliance Report’ covers the Investment Highlights, Shariah-compliance standards, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Section 1.2: What are the Key Metrics for Shariah Compliance to be Considered?

The Shariah Compliance Report aims to identify equities that align with Shariah and ethical principles, providing valuable insights on financial metrics, business activities and compliance with Islamic finance norms. 

Key Shariah Screening Criteria and Thresholds

Shariah Metrics for Apple Inc (NASDAQ: AAPL):

Revenue Segmentation of AAPL in Q1FY26 & Historical Compliance of Financial Ratios:

1.3 The Key Positives, Negatives, and Investment summary     

1.4 Top 10 shareholders:

The top 10 shareholders together form ~29.09% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~9.65% and ~5.00%, respectively.

1.5 Key Metrics:

Revenue and Profitability Trend Analysis

• Apple Inc. (AAPL) has demonstrated a stable growth trajectory over the past several years, with revenue expanding from USD 365,817 million in FY2021 to USD 416,161 million in FY2025, representing a four-year CAGR of approximately 3.28%. While revenue experienced a temporary moderation in FY2023, the company subsequently returned to a growth path, reflecting resilient demand across its hardware portfolio and continued expansion of its high-margin services ecosystem. This performance highlights Apple’s ability to sustain revenue growth even within a mature consumer technology market.
• From a profitability perspective, the company has delivered stronger improvement than revenue growth alone would suggest. Gross profit increased from USD 152,836 million in FY2021 to USD 195,201 million in FY2025, translating to a four-year CAGR of approximately 6.31%, indicating that profit expansion has outpaced top-line growth. This reflects a favorable product mix shift, higher contribution from the services segment, and operating scale benefits derived from Apple’s global ecosystem.
• Consequently, gross margins expanded steadily from 41.78% in FY2021 to 46.91% in FY2025, illustrating consistent margin enhancement driven by premium product positioning, strong pricing power, and the increasing share of services revenue. The margin expansion trend underscores Apple’s structural profitability advantage and its ability to extract higher value from its integrated hardware-software-services ecosystem.

Margin Comparison with Industry Peers

• Apple’s profitability metrics significantly exceed industry benchmarks, highlighting the company’s superior operational efficiency and ecosystem monetization capabilities. In Q1 FY2026, Apple reported a gross margin of 48.20%, substantially higher than the industry median of 29.20%, reflecting its premium product portfolio and strong services contribution.
• Similarly, Apple delivered an EBITDA margin of 37.60% compared with the industry median of 12.70%, while operating margin stood at 35.40% versus the industry median of 8.00%, underscoring the company’s strong cost discipline and scale advantages. At the profitability level, pretax margin reached 35.50%, significantly exceeding the industry median of 7.00%, while net margin of 29.30% remained materially above the industry benchmark of 5.70%.
• The company’s effective tax rate of 17.50% remains broadly aligned with the industry median of 16.10%, indicating that Apple’s superior profitability is primarily driven by operational strength rather than tax advantages. Overall, these metrics demonstrate Apple’s strong competitive positioning, reflecting its ability to maintain premium pricing, drive ecosystem monetization, and generate industry-leading profitability across the value chain.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q1FY26:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

• Price Consolidation Within a Strong Long-Term Uptrend: Apple Inc. (AAPL) has demonstrated a relatively stable price trajectory over the past year, with the stock currently consolidating following an extended upward move. The share price is trading near USD 255–258, marginally below the 21-day moving average (USD 263.91) and 50-day moving average (USD 263.17), suggesting a short-term pause in momentum after earlier gains. Despite this near-term softness, the broader trend structure remains constructive, as the stock continues to trade comfortably above its longer-term support zones established during previous market cycles, reflecting sustained institutional participation and underlying investor confidence.
• Momentum Indicators Reflect Neutral-to-Bearish Short-Term Sentiment: From a momentum standpoint, the technical indicators point to a balanced but slightly cautious outlook. The Relative Strength Index (RSI) is currently around 39.7, positioning the stock in the lower neutral range and indicating moderating buying momentum without entering oversold territory. This level suggests that the recent decline may largely represent profit-taking rather than a structural shift in sentiment. Additionally, trading volumes have remained relatively stable, indicating the absence of significant distribution by large market participants and reinforcing the view that the current movement represents consolidation rather than a decisive bearish trend.
• Key Support and Resistance Levels Define the Near-Term Outlook: Technically, the stock faces immediate resistance in the USD 263–265 range, where the short-term moving averages converge, potentially acting as a near-term ceiling for price recovery. A decisive breakout above this level could pave the way toward the previous highs near USD 285, restoring bullish momentum. On the downside, initial support is observed near USD 250, with stronger structural support located in the USD 230–235 range, historically serving as a demand zone during corrective phases. Overall, the technical configuration suggests that Apple is currently undergoing a consolidation phase within a broader bullish framework, with the next directional move likely dependent on a breakout from this defined trading range.   

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation    

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 22, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided have been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.