Apple Is Near a Record. Netflix Is Down More Than Half. I'd Buy Only 1 of Them.
One of these stocks costs under half as much relative to expected earnings. Is the cheaper one the better buy?
Apple's shares are trading near $350, close to their all-time high, and have risen about 29% so far in 2026. In contrast, Netflix's stock has plummeted about 54% from its June 2025 record high, sitting near $62 as of late October 2025. Using analysts' 2027 earnings forecasts, Netflix's price-to-earnings ratio stands at around 17, while Apple's is about 37.
However, the cheaper stock isn't necessarily the better buy. Netflix's growth has slowed, with revenue growth decreasing from 17.6% in Q4 2025 to 13.4% in Q4 2026. Apple, on the other hand, has been growing steadily, with revenue increasing 16% year over year in Q3 2025, and showing promising growth in services, which generated a record $30.7 billion in revenue in Q3.
Apple's services business has higher margins than its hardware, accounting for about 28% of its revenue and 42% of its gross profit. Additionally, Apple has been returning cash to shareholders, spending around $62 billion on buybacks and $12 billion on dividends in the first three quarters of fiscal 2026. Apple's growth in artificial intelligence, with products like Siri and upcoming smart glasses, could also drive further growth.
While Netflix might still be a fine investment at its current price-to-earnings ratio, the article suggests that Apple's installed base, services business, and potential in AI make it the more durable and attractive investment at its current price of around 37.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
