The new folding-screen iPhone starts at $1,999, setting a new price benchmark for Apple handsets. Despite this, Apple's stock trades at 36 times expected earnings, a premium not seen since the early iPhone growth days. This summer, Apple sporting a sustained valuation lead over Microsoft, Alphabet, Amazon, Nvidia, and Meta.

Among the Magnificent Seven, only Tesla commands a higher price-to-earnings ratio, inflated by low earnings. Historically, Apple's multiple was depressed by phone dominance fears and slow growth. The market still expects high single-digit earnings growth, slower than peers.

The company faces input cost inflation and slowing services growth. Yet the valuation persists, driven by investor desire for tech stocks insulated from AI concentration risk. As UBS analyst David Vogt notes, Apple is countercyclical when AI enthusiasm runs hot.

Apple sits out the AI capex spending fight, offering a sanctuary. Beyond avoiding AI risk, Apple sells trust in a data-short world. Privacy remains a cornerstone of the sales pitch, with former CEO Tim Cook repeatedly hammering data safety promises.

Current CEO John Ternus maintained this stance at the new phone launch. "Apple Intelligence" runs locally and uses an encrypted private cloud when needed, contrasting with competitors who "see [your] data as something to collect." This trust strategy has fostered immense loyalty, with iPhone users rarely switching brands. In the AI sector, trust is notably absent. Companies from Google to OpenAI and Anthropic have failed to establish accountability.

Until these entities make hard commitments akin to Apple's privacy promises, trust — and justified valuations — will remain elusive for the AI trade.