Bernstein reiterated an Outperform rating and a $380 price objective for Apple (NASDAQ: AAPL) on Thursday, telling clients the iPhone maker has assumed the role of a safe haven for money coming out of riskier AI-linked stocks. The brokerage says Apple’s valuation, now at an all-time high relative to consensus 2027 earnings, is supported by a combination of capital efficiency, device-level AI strategy and unusually durable customer behavior.
Analyst Mark Newman highlighted Apple’s low capital intensity as a central argument. Apple spends roughly 2% of revenue on capital expenditures, Newman noted, which stands in contrast to the heavy data center investment that underpins many AI plays. In addition, Bernstein emphasized Apple’s collaboration with Google on AI models that are designed to run on Apple devices rather than relying primarily on costly AI server fleets.
That architecture matters for Bernstein’s view of risk exposure. Because much of Apple’s AI work can operate on devices, the company is less exposed to a pullback in data center spending and to the compression of free cash flow that some hyperscalers are experiencing, the note said.
Newman also suggested Apple could benefit in a disinflationary scenario for AI - for instance, if an AI market correction created lower-priced acquisition opportunities for the company. "Furthermore, Apple could stand to benefit if/when the AI bubble actually bursts (e.g. from potentially cheap acquisition targets)," he wrote.
Those dynamics have coincided with a marked re-rating. Bernstein places Apple’s forward multiple at about 37 times consensus 2027 earnings, which it describes as an all-time high for the company. Within the cohort of large U.S. companies that have expected earnings growth below 15%, Bernstein identifies only Apple, Costco, Walmart and GE as trading above 30 times forward earnings.
The firm argued that Apple’s valuation is now more comparable to high-quality consumer names than to traditional tech peers. At roughly 37 times forward earnings, Bernstein said Apple appears cheaper than Costco and Walmart on a range of operational metrics - namely revenue growth, cash generation and shareholder returns - even while delivering stronger results on those fronts.
Customer behavior is a further pillar in Bernstein’s case. Newman compared Apple’s roughly 90% loyalty rate among iPhone users who upgrade on a four-year cadence with Costco’s roughly 90% annual membership renewal rate, using those retention statistics to underscore the stability of Apple’s ecosystem.
Responding to questions about whether Apple’s multiple is excessive, Newman wrote: "Is AAPL’s multiple outrageous? Considering its customer loyalty, earnings durability, growth, FCF generation and shareholder returns, we don’t think so." He added that Bernstein’s reverse discounted cash flow work implies a terminal growth rate of 4%, which the firm views as reasonable.
Market snapshots included in the note and accompanying data reflect current moves in shares of Apple and peer names: AAPL +2.04% COST +2.01% WMT +0.1% GE +1.43%. Price detail cited in the note showed AAPL at 355.63, up 7.12 (+2.04%) at the close noted as 11/11 in USD, with a pre-market quote of 356.74, up 1.38 (+0.39%).