Apple Returns to $5 Trillion Under John Ternus as Stock Beats S&P 500

Apple (AAPL) has rejoined the $5 trillion market capitalization club, a milestone first briefly achieved earlier this year during former CEO Tim Cook's leave. Under Cook's 15-year tenure, Apple stock rose more than 2,600%, establishing the company as the world's most valuable. John Ternus, who has succeeded Cook, has overseen recent product launches, including the new Apple HomeView device. The company faces the challenge of sustaining growth from such a high valuation baseline.

As of Oct. 16, Apple shares are outperforming the S&P 500 index. The stock has gained 27% year to date, which is more than double the year-to-date growth rate of the broader index. This performance is driven by strong sales across Apple's interconnected ecosystem of computers, watches, tablets, and iPhones. The new HomeView product is designed as a central home unit that accesses user data and performs tasks, further integrating customers into the Apple system. Once consumers purchase an initial device, they tend to remain within this ecosystem for subsequent technology purchases.

The iPhone remains the primary driver of the company's revenue, accounting for approximately half of total sales in a typical quarter. In the fiscal third quarter of 2026, which ended June 27, total revenue increased 16% year over year. iPhone sales specifically rose 22%, marking the third consecutive quarter where iPhone sales growth exceeded 21%. Ternus, formerly the head of hardware engineering at Apple, is tasked with maintaining this trajectory. While replicating the 2,600% gain seen under Cook is not feasible for a company already valued at $5 trillion, Apple continues to demonstrate the ability to outpace the wider market in 2026.

Investors are currently buying Apple stock based on its approach to artificial intelligence. Rather than overspending on AI models like some competitors, Apple is focusing on consumer hardware and adding AI services deliberately. However, the stock has become expensive as a result of this demand. It is currently trading at a price-to-earnings ratio of 39. This valuation suggests it may not be an ideal entry point for short-term buyers, though the company can still provide long-term value for investors holding shares for several years.