Google surpasses $4 trillion! A new opportunity with collaboration alongside Apple?

Futubull Options Sir

joined discussion · ·

Options Trading Spotlight | Apple's Moment of Decline: Market Cap Overtaken by Google! Is it a Crisis or a Golden Opportunity for Positioning?

This article comes from the 'Options Market Insights' column, which aims to position itself at the forefront of investment trends, providing readers with insights into market opportunities and teaching them how to seize these opportunities using options. If you are interested, feel free to subscribe.Click hereUpon joining the learning platform, you will receive notifications when subsequent columns are updated.

*The following content is for educational purposes only and does not constitute any investment advice. The information is time-sensitive, so please exercise caution in your judgment.

Among the seven giants of the US stock market, $Apple (AAPL.US)$ 's presence has recently seemed somewhat desolate, as if it has become the forgotten one.

Looking back at 2025, Apple's approximate 9% stock price increase for the year appears sluggish, not only lagging significantly behind the S&P 500 Index's rise of about 16%, but also paling in comparison among the seven giants. Entering 2026, the downturn hasn't lifted; the stock price continues to fluctuate and even ceded its position as the second-largest market cap to Google at the start of the year.

From the current technical perspective (data as of January 15 before the US market opened):Apple's stock price is currently showing an overall weak pattern,with moving averages displaying a bearish alignment, downward trends in the medium and short term, and the MACD confirming downward momentum. The decline is accompanied by increased volume, indicating ongoing capital outflows. However, several short-term indicators (such as RSI, KDJ) have entered severe oversold territory, which is typically seen asa potential signal for a short-term rebound.。

There have been too many stories about being at the forefront, but investing shouldn't just chase the noise at the crest of the wave—it needs to see through the fog to recognize where value settles. So today, let’s slow down and take a closer look atthis former favorite—does its desolation mark the beginning of faded glory, or is it merely a temporary retreat?

1. AI Catch-Up + Product Year: Can this be the key to breaking the slump for Apple?

Since the fourth quarter of 2025, Apple's dynamics have revolved around two main themes: 'AI catch-up' and 'product-heavy year,' which could be decisive factors for its performance and market sentiment in 2026.

At the fall product launch event in September 2025,$Apple (AAPL.US)$ Apple unveiled the iPhone 17 series, iPhone Air, AirPods Pro 3, and a new lineup of Apple Watches, following the earlier release of the MacBook Pro and iPad Pro equipped with the M5 chip. The product portfolio appears robust, but netizens have criticized it for lacking innovation and not meeting expectations regarding AI advancements.

The revamped Siri and other AI features originally slated for 2025 were postponed to 2026, clearly indicating that Apple’s in-house progress has been slower than expected — one key reason behind its recent collaboration with Google. Earlier this month, Apple struck a multi-year partnership with Google, adopting Google’s Gemini model as the foundation for Apple Intelligence and the next-generation Siri.Shifting from self-research to rapidly addressing AI capability gaps through partnerships,with the aim of launching a competitive AI feature suite by 2026.

Worth looking forward to, thenext-generation Siri is expected to debut in the spring of 2026 (March-April),around which time Apple will also release its first smart home hub (with a screen) powered by a customized version of the Gemini model. This is seen as a critical milestone for Apple Intelligence to demonstrate practical value. However, according to Morgan Stanley estimates, the paid version of Apple Intelligence may not monetize until 2027 at the earliest, meaning AI's direct contribution to revenue and profits will remain limited in the short term.

In addition, according to market reports,2026-2027 will be a super upgrade cycle for Apple products, which may significantly stimulate replacement demand.。

● 2026: The first half of the year is expected to see the release of the iPhone 17e (affordable version), the MacBook series equipped with the M5 chip, as well as the first smart home hub and the next-generation Siri. The MacBook Pro is also expected to receive its first major design overhaul since 2021 by the end of 2026.

● Second half of 2026: Major innovations are coming, including the long-rumored first foldable iPhone (horizontal 'book-style' design), and the iPhone 18 Pro series (which will fully adopt Apple's self-developed C2 communication module for the first time,告别高通基带).

● Starting from 2027: Multiple headset and smart glasses products will be released, with at least 3 models in the Vision series and 4 models of smart glasses currently planned.

● Long-term outlook: The company plans to upgrade the iPhone’s main camera to 200 megapixels by 2028 and significantly expand its product lineup over the next two years.

So, will these product updates and the push in AI be powerful enough to drive decent growth in performance?

In the latest earnings data as of October 2025,$Apple (AAPL.US)$ Revenue reached $102.466 billion, an 8% increase year-over-year, with service revenue hitting a record high of $28.8 billion; net profit surged 86.4% to $27.47 billion. The company anticipated optimistic performance for the next quarter, expecting revenue to grow 10-12% year-over-year, with iPhone revenue potentially reaching an all-time high.

At the same time, the company continues to execute an aggressive shareholder return program, repurchasing $95 billion worth of stock and distributing $15.2 billion in dividends during the fiscal year 2024, reflecting its strong financial position. Additionally, Apple holds more than $130 billion in cash and marketable securities, providing it with robust cash flow that gives it high risk resistance and acquisition potential by 2026.

Clearly,Apple's business structure presents a robust pattern of 'hardware as the base, services as the wings'.The iPhone remains the core revenue pillar (accounting for nearly half), but the high-growth, high-margin service business (including the App Store, cloud services, etc.) has become the second-largest and more stable profit engine. This segment's 15% growth rate significantly outperforms hardware, enhancing the company's overall profitability.

Looking ahead, the key drivers of Apple’s growth will be the dual engines of 'premiumization' and 'AI integration'.The market will be watching its AI-driven upgrade cycle and the ongoing monetization potential of its service business.One aspect is the implementation effect of the AI strategy, assessing whether the new version of Siri and Gemini can enhance user stickiness; the other is the increase in the penetration rate of the service business, especially the growth potential of enterprise-level services and payment businesses.

Factors that could drive Apple's growth include replacement demand from full-line product iterations, economies of scale in the service business, high user loyalty creating an ecosystem moat, and new growth curves enabled by AI technology. However, concerns remain over macroeconomic conditions, tariff costs, competitive pressures in the Chinese market, which are seen as major risks and uncertainties. Additionally, news about potential CEO succession at Apple may also cause stock price volatility.

Second, what exactly is the market’s debate between bulls and bears?

Currently, there are mixed views on Apple’s future outlook.

The bullish perspective primarily rests onBullish voices argue that Apple Intelligence will be the key driver of a multi-year upgrade cycle, combined with its resilient ecosystem, strong supply chain bargaining power, and the service business poised for further growth. Even if hardware sales fluctuate, stable service revenue and high gross margins will provide support. Morgan Stanley has listed Apple as its top tech hardware pick for 2026.

On the bearish side, the main arguments focus onbelieving that Apple is facing a growth dilemma, its AI strategy lags behind peers, and it confronts weak iPhone demand. With hardware sales growth stalling and the AI narrative yet to fully materialize, the current high valuation may lack sufficient support. The recent stock performance likely already reflects investor concerns about its short-term growth momentum and the effectiveness of its AI transformation.

In summary,Apple’s long-term ecosystem moat remains solid, but it faces challenges in shifting growth drivers in the short term. The market divergence boils down to this: optimists believe AI is the key to unlocking the next growth chapter, while cautious investors feel that the relatively high valuation has already priced in some future potential before the key turns.

The latest analyst rating data on BullBull shows that among 27 analysts, approximately 67%, 26%, and 7% have issued Buy, Hold, and Sell ratings, respectively. The average target price for Apple over the next 12 months is around $309, with the highest and lowest targets at $350 and $230, respectively.

Now, let’s address one question: Is Apple's valuation currently expensive?

Based on real-time market data (as of January 15, before the US stock market opened),$Apple (AAPL.US)$ its P/E ratio (TTM) is approximately 34.85x, and mainstream market opinion suggests its valuation is within areasonably high range.。

A P/E ratio of around 35x is higher than the market average, reflecting investors’ willingness to pay a premium for its brand moat, financial certainty, and ecosystem value. However, this multiple has contracted compared to its historical highs and some high-growth AI peers, possibly indicating that the marketis applying a stable premium while discounting its growth prospects, with sentiment leaning cautiously optimistic overall.。

Compared to aggressive players like Microsoft and Google, which have made significant investments in AI and are experiencing strong cloud business growth,$Apple (AAPL.US)$ because of its large proportion of hardware revenue and relatively moderate growth expectations, its valuation premium is being challenged. The current P/E ratio may already partially reflect the market's expectations for Apple's AI success by 2026.

Let’s break this down further from the perspective of 'stock price = EPS × P/E.' The market consensus for Apple's EPS in fiscal year 2026 is approximately $8.21. If we calculate based on the current P/E ratio of about 35 times, the corresponding stock price would be around $287.

This represents a relatively baseline scenario. Of course, conditions could shift towards either a more optimistic or pessimistic direction. If the iPhone with AI functionality released in the fall of 2026 triggers an unexpectedly strong wave of upgrades, foldable phones prove highly successful, or service business growth accelerates, both EPS and P/E could rise simultaneously. Conversely, if AI features receive lackluster responses, fail to stimulate upgrades, lead to continued loss of market share in China, or exacerbate weakening global consumer electronics demand, both EPS and P/E could decline.

III. Investment Strategy and Options Trading: How to Position Apple Amidst Uncertainty?

At this point, let’s establish a core conclusion:Apple’s current stock price reflects its solid fundamentals and moderate growth expectations, with its valuation at the upper limit of a reasonable range. Its investment value hinges on whether it can successfully drive a new cycle of hardware upgrades via 'AI + ecosystem.' It may offer allocation value for long-term investors but lacks strong near-term catalysts, potentially offering limited appeal for those seeking explosive growth.

If you are an investor with low-to-moderate risk tolerance who prefers stable cash flow and leading stocks,Apple might be relatively suitable as one of your core stock candidates, though you must accept that its valuation isn’t cheap and its growth rate may be relatively moderate.

Building on this,$Apple (AAPL.US)$ Characteristics such as a strong financial position, abundant cash flow, ongoing share repurchases and dividend payouts, relatively mild stock price fluctuations compared to most tech stocks, and downside protection provided by ecosystem and service revenues may give you a certain sense of security. However, there is also the possibility of growth being steady rather than rapid, potentially lagging significantly behind high-growth AI stocks during bull markets or AI-themed rallies. Additionally, the current valuation isn't cheap, so buying at a higher level could expose you to the risk of valuation corrections.

If you're an investor with a higher risk tolerance looking to bet on high-growth AI stocks, then Apple might not be the best fit for you because its approach to AI is more defensive and long-term rather than typically explosive in nature.

If you’re an investor who prefers swing trading or accumulating positions during dips and reducing holdings at peaks, the current technical oversold condition of Apple's stock and divergence from long-term fundamental value could present trading opportunities. Short-term technical indicators (such as RSI below 30) suggest an increased probability of a rebound, while key resistance levels (e.g., the 60-day moving average around $271) can serve as reference points for scaling back positions. Events like Siri updates or the release of foldable iPhones could act as catalysts for short-term price movements, but stop-loss lines should be strictly set.

So,besides directly buying or selling stocks right now, are there any more flexible tools that can match different expectations? The answer is yes, options are tools designed specifically for this purpose.

Before discussing specific strategies, it’s important to note: Apple’s stock price is currently in a range-bound state supported by fundamentals at the bottom but capped by growth concerns at the top, possibly requiring new catalysts to break the current balance. Therefore, option strategies need to be built around two core themes: volatility and event speculation. Additionally, Apple’s current implied volatility (IV) sits at a relatively moderate historical percentile (44%), which is relatively neutral for both buyers and sellers.

Alright, let’s talk about specific option strategies tailored to different market expectations and risk preferences.

Strategy One: Want to accumulate shares at a lower price but afraid of catching a falling knife? Try Sell Put (selling put options).

● Target Audience and Scenarios:Long-term positive outlook$Apple (AAPL.US)$ Investors who see value in a stock but want to buy at a lower price, without blindly bottom-fishing. Suitable for volatile markets where you believe the current share price has entered a value range but may continue to drop in the short term.

● Strategy Logic:This is a conditional stock accumulation strategy. You sell (open a position) a put option, immediately collecting the premium. In exchange, you commit to buying the corresponding number of shares at the strike price if the stock price is below it at expiration. Your goal is either to earn the premium when the stock price stays above the strike or to buy shares at your desired price if it falls below.

● How to Build It:Choose a strike price at which you genuinely want to buy Apple stock, usually slightly out-of-the-money (a bit below the current market price). The lower the strike price, the smaller the chance of being assigned, but the less premium income you’ll receive. Consider options expiring in 30-60 days—too short a duration yields limited premiums; too long increases uncertainty and lowers capital efficiency.

● Profit and Loss Characteristics:The maximum profit is the full premium collected from selling the option. At expiration, as long as the share price is above the strike price, the option expires worthless, and you achieve this profit. The theoretical maximum loss is significant: strike price * contract size - premium received. However, for assets like Apple in this scenario, the more realistic risk is ending up with shares purchased at a higher-than-market cost. Break-even point = strike price - premium per share received.

For specific profit and loss scenarios at expiration, refer to the chart below for educational purposes only and not as investment advice.

● Notes:This is not a purely bullish strategy but rather neutral-to-bullish. You hope for the stock price to remain flat or rise, but you're not afraid of minor declines. Ensure sufficient margin and cash available to take delivery. Always choose a strike price at which you’re willing to hold long-term, avoiding forced high-cost positions due to sharp price drops.

Strategy Two: Is holding stocks too boring? Try Covered Call (selling covered call options)

● Applicable audience and scenarios:Already holding$Apple (AAPL.US)$ stocks, but not expecting a significant short-term rise, believing that the stock price will experience mild fluctuations. The goal is to generate additional cash flow for the holdings and reduce the cost of holding shares.

● Strategy logic:On the basis of holding 100 shares of the underlying stock, sell one call option (Call). You collect the premium as rent, at the cost of capping the upside: If the stock price rises significantly above the strike price, your shares may be exercised and bought away, missing out on some of the gains.

● How to construct:Choose a strike price higher than the current stock price and key technical resistance levels. The higher the strike price, the lower the risk of being exercised, but the thinner the premium. Consider options expiring in about a month, which allows for monthly rolling operations to continuously collect premiums.

● Profit and loss characteristics:The potential maximum profit is limited to the premium income + (strike price * number of contracts - stock purchase cost). The potential maximum loss is the same as holding the stock alone, but the premium collected can partially offset downside losses.

For specific profit and loss scenarios at expiration, refer to the chart below for educational purposes only and not as investment advice.

● Notes:This is a strategy that gives up potential upside for certain income. If the stock price rises sharply due to better-than-expected performance, you will miss out on gains above the strike price. Therefore, this strategy is more suitable for volatile or mildly bullish market conditions. If you're very optimistic about future performance, consider choosing a deeper out-of-the-money Call or postponing action. If the stock price approaches the strike price and you don’t want to sell your shares, consider rolling up (closing the current Call and selling a new Call with a higher strike price and farther expiration date).

Strategy Three: Playing Oversold Bounce? Try the Bull Call Spread (a bullish options strategy)

● Suitable Audience and Scenarios:Do not hold stocks, but are optimistic$Apple (AAPL.US)$ about a short-term technical rebound while finding direct Call purchases too expensive in terms of premium. This is a cautiously bullish strategy with limited risk and reward.

● Strategy Logic:Simultaneously buy 1 at-the-money or slightly out-of-the-money Call and sell 1 Call with a higher strike price (both with the same expiration date). The income from selling options helps offset the cost of buying options, reducing overall premium expenses and maximum loss, with the trade-off of capping upside profit.

● How to Build:For technical rebounds, typically choose options expiring within 30-60 days to cover the expected rebound window. The strike price of the purchased Call should generally be at-the-money or slightly out-of-the-money, which is key to profiting from the rebound. The sold Call’s strike price should be set at a resistance level you believe the rebound is unlikely to surpass.

● Profit and Loss Characteristics:The potential maximum profit is limited to ((higher strike price - lower strike price - net premium cost per share) * number of contracts). Potential maximum loss is limited to the net premium paid when constructing the strategy. Break-even point = lower strike price + net premium cost per share.

For specific profit and loss scenarios at expiration, refer to the chart below for educational purposes only and not as investment advice.

● Notes:This is a strategy with limited odds, using a lower cost to bet on a rebound. It requires a clear judgment of the rebound height and preparation for the possibility of losing the entire net expenditure if the rebound does not occur as expected. If the stock price rises significantly beyond the strike price of the sold options, your profit will be locked in, preventing you from benefiting from further upward movement.

If you want more inspiration regarding options strategies, you can easily get it on the mobile app or the new desktop version by following these steps!

Alright, that's it for today. Welcome.Click hereJoin the learning group, and you will receive notifications when new updates to the column are published. We also strongly welcome any specific content suggestions!

Finally, here’s a small perk for fellow investors. Welcome to claim it!Options Beginner's Package（*This event is exclusively for HK invited users. Click to learn more.Detailed event rules>>）

282

442K Views