Apple Stock Is Up 22%, but 1 Slowing Business Could Test That Valuation

Apple stock has surged 22% in 2026 and trades at a premium 38x earnings valuation. However, the company's high-margin services business—which contributes 40% of gross profit—is showing concerning slowdown, with growth declining from 12% to 10% year-over-year and expected to further decelerate to 8-9% in Q1 2027. If services growth continues to weaken, the stock's expensive valuation may become difficult to justify despite strong product sales.