Apple Needs ‘Defining’ New Product to Justify Outperformance, Analyst Says

Apple Inc. may be posting its strongest quarterly sales growth in more than four years, but according to Rosenblatt Securities senior analyst Barton Crockett, the tech giant needs a new “defining” product category to deliver meaningful market outperformance.

In an interview following Apple’s blockbuster earnings report, Crockett acknowledged the company’s success, with shares rising approximately 3.3% on the day. However, he struck a measured tone on the stock’s long-term potential, maintaining a neutral rating with a price target of $276 per share.

“Neutral is not bad,” Crockett said. “Apple has been moving in line with the market over the last one to three years.” He noted that while the stock trades at a premium multiple of 32 times forward earnings with mid-teens EPS growth, investors expecting significant outperformance need to see Apple “really lean into new defining kind of product category.”

Crockett identified several possible future avenues, including foldables — which he called “an increment as opposed to a game changer” — as well as augmented reality glasses. He also speculated that if Elon Musk’s vision of humanoid robots becomes reality, Apple’s brand could make it “a player there.”

On the recently launched low-priced Mac laptop (codenamed Neo), Crockett praised Apple’s execution, noting it puts the company in direct competition with Chromebooks for the first time. “They are cleaning up in that space,” he said, adding that Apple has moved opportunistically given cost pressures on Chromebook makers. However, he cautioned that the Mac represents only about 10% of sales. “It’s not the needle mover.”

Crockett also highlighted the strength of the iPhone 17 cycle but warned that sustained high growth is unlikely. “Everyone has one,” he said. “It has to slow down. You have to see that next new big thing to really justify moving overweight into a stock like this.”

When asked about broader market risks tied to the dominance of mega-cap tech names, Crockett pointed to unprecedented capital expenditure on artificial intelligence — $750 billion from hyperscalers this year alone — as a potential long-term lift. He noted early productivity gains from AI tools, particularly agentic features from Claude, but said he currently prefers other names in the sector.