I would be more concerned about slowing Services growth than rising memory costs. Component inflation may be cyclical, but sustained weakness in Apple's high-margin Services business could have longer-term implications for earnings quality and valuation.
Apple's ecosystem and customer loyalty remain formidable competitive advantages. However, a forward P/E approaching 36 leaves limited room for disappointment, particularly when gross margins are expected to decline.
I would prefer to wait for evidence of margin stabilisation rather than buy solely because the share price has corrected. My key indicators would be Services revenue growth, gross margins, free cash flow and whether AI features meaningfully accelerate device upgrades.
Ultimately, record revenue does not automatically justify a premium valuation. Sustainable earnings growth and cash generation matter more than headline sales figures.
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