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Ternus inherits an Apple priced at about 45 times its $112 billion profit
Fortune's 50-year data set puts services above a quarter of this year's revenue and 2025 profit at about $112 billion, up from roughly $2 billion in 2006. Fortune puts the new CEO's test on the data-centre buildout Apple has skipped.
The Investor · Invest desk
What happened
- John Ternus took over as Apple's chief executive on Sept. 1, succeeding Tim Cook.
- Apple's annual profit rose from roughly $2 billion in 2006 to about $112 billion in 2025, a nearly 60-fold increase in under two decades, according to Fortune's 50-year data set.
- Services, a division that barely existed 15 years ago, is projected to bring in more than a quarter of this year's revenue, covering the App Store, iCloud, Music, TV, payments and advertising.
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Why it matters
- constraint Services is reported as a percentage of sales, and that percentage rises in any year the iPhone weakens, so the share alone cannot tell shareholders whether the recurring business actually grew.
- decision The buildout Apple skipped leaves the capital uncommitted, and reversing course means Ternus spends on capacity his predecessor chose not to own.
- contradiction Fortune treats services as the clearest evidence that hardware cycles now matter less, and in the same piece makes the AI spending restraint the thing that decides whether Apple keeps growing.
- exposure At that multiple, a missed upgrade cycle reaches holders through the valuation well before it reaches the earnings line, and that gap is the shareholder's exposure.
A $5 trillion company earning about $112 billion a year trades at roughly 45 times its own profit [9][2][1]. Ternus inherits that price along with the record behind it: profit went from roughly $2 billion in 2006 to about $112 billion in 2025, which is 56 times over, or about 23% compounded every year for 19 years [2][2].
The services figure is a share of revenue, and Fortune publishes it as a projection: more than a quarter of this year's sales, from a division that barely existed 15 years ago [4]. The iPhone is still roughly half of 2025 sales [3]. Subtract both and Mac, iPad, wearables and accessories together come to less than a quarter of revenue [4]. Fortune does not publish the services division's revenue in dollars or its margin.
The sales base moved with it. The US is still the largest market, with substantial shares from Europe, Greater China, Japan and the broader Asia-Pacific region [7], sold through more than 500 stores worldwide [6].
The long-window number Fortune leads with is the stock. A $10,000 stake in the 1980 IPO, held through the splits, would be worth about $40.5 million by mid-2026, Fortune reported [8]. That is 4,050 times the stake across 46 years, close to 20% a year [3], slower than the 23% the profit line compounded at, though over a longer and earlier window [2].
Cook built the $5 trillion company on supply-chain discipline and cash-flow strength, according to Fortune [9]. Fortune's Phil Wahba wrote that Cook "ultimately built his own respected legacy, not in spite of being unlike Jobs, but because of it" [10].
Fortune locates the next test in capital spending. Microsoft, Google, Meta, Amazon and Oracle are pouring tens of billions into data-centre buildouts for the AI race; Apple has deliberately stayed out, betting on privacy-first, on-device AI delivered through premium hardware [11]. "Whether that restraint proves prescient or costly will determine whether Ternus's Apple keeps growing," Fortune wrote [12]. Fortune also reads the 50-year figures as evidence that capital discipline will stay a big focus in the next era [13].
What has been published fits more than one reading. Restraint works, and on-device AI keeps buyers replacing premium hardware that carries the services attachment. Or restraint costs a capability Apple has to buy or rent later at someone else's price. Or AI matters less to replacement demand than the budgets of those five spenders imply. I would put the most weight on the second, because whether Apple can ship competitive AI features from the device alone is a separate question from its services share of revenue. The evidence that would move me is a quarter in which iPhone revenue falls and services revenue in dollars still grows.
What to watch
- Any Apple commitment to owned or contracted AI data-centre capacity. A commitment would turn the abstention Fortune describes into a timing decision.
- Whether the $5 trillion valuation holds through a quarter in which iPhone revenue falls.
- Whether Ternus keeps the capital-discipline posture Fortune reads into the 50-year figures, or funds a buildout.