<div id="readability-page-1">Apple (AAPL 0.53%) is a tech titan that needs no introduction. It's one of the most iconic -- and beloved -- brands on the planet, and it was the first publicly traded stock to reach $1 trillion, $2 trillion, and $3 trillion in market capitalization. However, Apple stock has lost a bit of its luster this year, with tariff fears and a federal antitrust lawsuit weighing on investor sentiment. As of July 3, the stock is down 14.5% in 2025, and it's down 3% over the past 12 months. Is this a good time to pick up Apple shares at a discount? Here are three reasons why that could be a strong move for your portfolio. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjM4OTcvYXBwbGUtaXBob25lcy5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjM4OTcvYXBwbGUtaXBob25lcy5qcGcmdz03MDA"/>Image source: Apple. </div> <h2>Apple is a cash machine</h2> While Apple stock may have temporarily lost some of its shine, Apple the company is still printing money -- and sitting on a mountain of cash. That's the first reason to buy Apple like there's no tomorrow. In its fiscal 2025 second quarter, which ended March 29, Apple reported $95.4 billion in revenue, up 5% from the year-ago period. Diluted earnings per share (EPS) increased 8% to $1.65, a record high for Apple's January through March quarter. In Q2, Apple's operating cash flow -- the cash generated from its core business operations -- was $24 billion. While that was about $3 billion less than what Nvidia generated in its fiscal 2026 first quarter, it's still an enormous cash stream that gives Apple the flexibility to invest in R&amp;D, make strategic acquisitions, and reward shareholders. And rewarding shareholders is where Apple really shines. Since fiscal 2012, Apple has returned nearly $1 trillion to shareholders through stock buybacks and dividends -- likely more than any company in history. In Q2 2025, Apple's board rubber-stamped another $100 billion in stock buybacks. While Apple might not be the flashiest tech player in a market that's fixated on AI plays right now, it's still a cash-generating powerhouse with a shareholder-friendly track record that's unmatched by its peers. <h2>Apple's services business is booming</h2> The second reason to pile into Apple stock is its services business, which includes Apple Pay, Apple TV+, iCloud, and Apple Fitness+. In Q2, revenue from services jumped 12% to $26.6 billion, a record high for the company. While that was less than half the revenue from iPhone sales, services is Apple's most profitable segment, with a gross margin of nearly 76% in the second quarter -- double the gross margin for hardware. Apple now boasts more than 1 million paid subscriptions across its services -- a staggering figure that points to the strength and stickiness of its ecosystem. This is predictable, high-margin revenue that can smooth out the ebbs and flows of hardware sales. But it also has the potential to play an increasingly larger role in Apple's long-term growth, especially if Apple can successfully integrate generative AI into its services and create experiences that keep users even more deeply embedded in the Apple ecosystem. <h2>The AI opportunity</h2> I'd be remiss if I didn't mention that Apple has been playing catch-up in the AI race, and that's likely one reason the share price has been under pressure this year. The company launched Apple Intelligence -- a new suite of generative AI features for iPhone, iPad, and Mac users -- in October 2024 and unveiled new AI capabilities in June. But Apple's plans to release a new AI-powered Siri with in-house technology by spring 2025 have been pushed back to 2026. In a recent blog post, analysts Brian Baker and Gene Munster asserted that Apple's best option might be to acquire Perplexity, an AI-powered answer engine that's developing an agentic AI browser called Comet. &#34;Perplexity's strengths in AI search could help Apple develop a real alternative to Google Search -- especially useful with the FTC potentially threatening Apple's current multibillion-dollar default search deal with Google,&#34; the analysts wrote. &#34;This could fast-track a seamless, AI-native search experience deeply tied into the OS across all Apple devices.&#34; Whatever route Apple takes, the company is approaching the AI challenge from a position of strength, in my opinion. With its rock-solid core business and massive cash stockpile, Apple can afford to take its time to get AI right -- and make a strategic acquisition if necessary. <h2>Apple is trading at a reasonable valuation</h2> The third reason to buy Apple stock is its valuation, which stacks up favorably against other members of the Magnificent Seven. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/2b049cc46defe66102d8bc53421d7951.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="507" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/2b049cc46defe66102d8bc53421d7951.png"/> AAPL PE Ratio (Forward) data by YCharts On a forward basis, Apple is trading at a price-to-earnings (P/E) ratio of 29.7, which is lower than that of Nvidia, Tesla, Microsoft, and Amazon and slightly higher than Meta Platforms at 28.1. That seems like a fair valuation for a company with unparalleled brand loyalty, prolific cash flow, and a growing ecosystem of high-margin services. </div>

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Apple's stock has faced challenges, down 14.5% in 2025, but remains a strong buy due to its robust financials, including $95.4 billion in Q2 revenue and $24 billion in operating cash flow. The services segment is thriving, with a 12% revenue increase, and Apple is well-positioned in the AI space, despite some delays. Additionally, its valuation is attractive compared to peers, making it a compelling investment opportunity.

- Apple Inc. has experienced a 14.5% decline in stock value in 2025, attributed to tariff concerns and an antitrust lawsuit.  
- Despite this, the company reported $95.4 billion in revenue for Q2 2025, with a significant increase in its services segment, which generated $26.6 billion in revenue.  
- Analysts suggest that Apple's reasonable valuation and strong cash flow position it well for future growth, particularly in the evolving AI landscape.

3 Reasons to Buy Apple Stock Like There's No Tomorrow