Brett Schafer, The Motley Fool

Fri, Jun 20, 2025, 3:55 AM6 min read

• Apple is still driven by iPhone sales, and it failed to successfully launch the Vision Pro headset.

• The services segment is growing steadily, but under risk from lawsuits.

• Apple's stock trades at a high earnings ratio today.

• 10 stocks we like better than Apple ›

After peaking at around $260 near the end of 2024, Apple's (NASDAQ: AAPL) stock price has entered a bear market. Even with the wide stock market indices approaching new all-time highs, shares of Apple are down 25%, making it one of the worst-performing large-cap technology stocks in 2025.

Investors are worried about tariffs, slowing revenue growth, and antitrust lawsuits that may impact the smartphone maker's future earnings power.

Is now the right time to buy the dip on Apple stock? Let's put the numbers to the test and show why Apple is a risky big tech stock to purchase today.

The iPhone is still a blockbuster consumer product. Over the last six months alone, the segment has generated more than $100 billion in revenue for Apple, making it the most popular smartphone in the world by revenue.

The problem for investors is the fact sales have stagnated for the last few years. Apple has been able to consistently raise the price of new iPhones, but upgrade cycles are proving longer and longer for consumers, meaning they are going more years before buying the latest device. This is a major headwind to revenue growth.

In order to expand its ecosystems of devices, Apple has made inroads into wearables like the Apple Watch and AirPods. These are successful products, but will not move the needle for Apple's $400 billion in consolidated annual revenue. To do that, Apple made its largest hardware launch since the iPhone with the Vision Pro virtual reality headset. A device that costs $3,500, the headset was supposed to be Apple's next big computing paradigm, giving its users more advanced computing tools for work and pleasure.

So far, it looks like the Vision Pro has been a flop. Estimates are that unit sales are cumulatively less than 1 million, with many purchasers reportedly stopping using the device after a trial period.

Apple remains a hardware provider tethered to iPhone sales, a product category that has matured. Expect more struggles to grow revenue on the hardware side of things in the years ahead unless Apple can come up with a breakthrough new computing device.

The golden goose of Apple's business in the last few years has been its software and services segment. Including App Store revenue, licensing deals, and revenue from its first-party apps such as Apple Music, services revenue has grown from $13 billion in 2012 to $102 billion over the last 12 months.