Although Apple (AAPL 0.59%) Although the stock fell nearly 12% from its 2024 high (as of Tuesday’s close) during last week’s sell-off, that didn’t give me any incentive to buy.

So why am I mad at a stock that so many others are bullish on? It has everything to do with valuation.

Apple’s growth was weak

If you live in the US, you probably either own an iPhone or another Apple product, or know someone who does. Apple is a little less dominant worldwide, but it’s still a very well-known and popular brand.

Because Apple’s business is primarily focused on high-end electronics, it is more vulnerable to demand cycles than companies that sell less expensive electronics. In the face of inflation, Apple’s revenues have declined.

AAPL revenue data (quarterly year-on-year growth) from YCharts. YoY = Year over Year.

Since the beginning of 2022, Apple has struggled to post double-digit revenue growth and has even had a few quarters where sales declined compared to the same period last year. In the last quarter, revenue increased year-on-year, but sales of its flagship product, the iPhone, declined slightly year-on-year.

The last two and a half years would have been much worse for Apple if it weren’t for its services division, which includes revenue from advertising, the App Store, cloud services and digital content like Apple TV and Apple Music. Unlike hardware revenue, which fluctuates, the services division has more of a subscription model in its nature, which is a good balance to the more cyclical side of the business.

But is that enough to justify buying the stock?

The numbers are not correct for the share

Premium companies trade at premium valuations. Some companies simply have such high revenues that investors are willing to pay more for them. Apple has been in this position for some time, but I want to challenge that notion.

Sales growth was weak and although earnings growth has kept pace with the overall market, the company is still struggling to achieve double-digit growth.

AAPL EPS basic data (quarterly year-on-year growth) from YCharts. EPS = earnings per share; YoY = year-on-year.

Since Apple has not produced inspiring results for almost three years, I am convinced that the company does not deserve its premium.

AAPL P/E data by YCharts. P/E = Price to Earnings Ratio.

At 32 times forward earnings and 33 times current earnings, the stock is as expensive as it was in early 2021. Back then, revenue was up 50% and profits were doubling year over year. Apple was worth the premium investors paid then, but the current Apple is not.

Investors are clinging to the notion that Apple Intelligence, the company’s generative AI product, will be a must-have and will drive consumers to upgrade to the latest iPhone. Since this feature can only run on the latest generation of phones, it could spark a wave of upgrades. But that’s not guaranteed and wouldn’t do much for the stock other than a one-time surge in demand.

There are much better technology investments. Microsoft trades at almost the same valuation but consistently posts double-digit revenue and earnings growth. Or you could look at Meta platforms, which is cheaper and growing incredibly fast (second quarter sales up 22% and profits up 75%).

Apple is simply too expensive and is not performing as well as it needs to be to justify its valuation. There are far too many better companies to invest in at these prices and I think investors would be better off putting their money there.