AAPL at ~$337: what the price is actually betting on (earnings Oct 29)
Apple reports on Nov 2 (confirmed on its investor site), so here's what the current price implies, before the headlines.
**The price:** ~$337, about $4.9T market cap. Free-cash-flow yield is roughly 2.8%.
**What our model assumes:** a very strong FY2026 (+14.6% revenue), then growth easing to 7%, 5.5%, 5% and 4.5%, with operating margins around 31%. Discounted at a 10.6% cost of capital (10-year Treasury at 5.24% plus Apple's equity risk), the cash flows come out well below today's price.
**So what's the market assuming instead?** One of two things, roughly:
- Cash flows grow ~7.5% a year *forever*, not fading to GDP-like growth, or
- Investors are willing to own Apple for barely more than the Treasury yield, treating it almost like a bond.
Run it as a reverse DCF on revenue growth alone and the answer is "more than 25% a year", which really just means growth alone can't explain this price. The disagreement isn't about last quarter. It's about the discount rate and how long Apple keeps growing.
**What to watch on Nov 2:** whether services growth and margins hold up (that's the durability case), and guidance for FY2027. A beat on iPhone units matters less than signs the growth lasts.
Every input and its source (10-K lines, FRED rate series) is here: https://tickerworth.com/stocks/AAPL/intrinsic-value?utm_source=reddit&utm_medium=sub&utm_campaign=seed_aapl
What discount rate would you use for Apple? Genuinely curious where people land.
*Not investment advice. We explain what a price implies; the decision is yours.*