Apple shares fell 1.8% on Monday as the company began its first leadership transition in more than a decade, with John Ternus formally taking over as chief executive from Tim Cook on September 1. Cook, who led Apple for 15 years, will remain as executive chairman rather than leaving the company entirely. The transition was first announced in April, and Ternus—previously Apple’s longtime hardware engineering chief—now leads a business with a market capitalization of approximately $4.67 trillion and shares trading near $319.70.
Cook’s legacy is defined by extraordinary scale. Apple’s stock has risen roughly 2,000% since he succeeded Steve Jobs in 2011, and the company has returned more than $1 trillion to shareholders through dividends and buybacks. In fiscal Q3, Apple reported revenue of $109.4 billion, up 16% year over year, while diluted earnings per share rose 29% to $2.02. iPhone, Mac and Services all set June-quarter revenue records. Counterpoint Research estimates Apple will sell about 255 million iPhones this year, compared with about 72 million in the year Cook became CEO.
However, Ternus inherits significant pressure points. Apple’s artificial intelligence strategy—especially the overhauled Siri—is seen as the most immediate challenge. Futurum Group CEO Daniel Newman said Apple needs to identify the next major computing platform after the smartphone, adding: “Apple needs to own this.” He noted consumers increasingly use services such as ChatGPT and Claude through Apple devices, but argued Apple has yet to fully capitalize on that position. Newman also questioned whether the handset will remain the device of the future, pointing to efforts by OpenAI and Meta to develop new devices.
Valuation is another concern. Apple trades at about 33 times next year’s earnings, compared with roughly 20 times for the S&P 500, even though its earnings are growing at about half the market’s rate. Craig Moffett of Moffett Nathanson cautioned: “when valuation gets stretched, safety isn’t safe anymore.” Supply-chain risks include competition for memory, storage and logic-chip capacity, potential cost increases, and Apple’s continued dependence on China. The services business also faces pressure after a California judge’s rulings reduced Apple’s ability to collect fees from some in-app purchases; Appfigures estimates US App Store commission revenue fell 6% in the June quarter.
There are also opportunities. The iPhone remains highly popular, Mac demand is benefiting from Apple-designed chips capable of running large language models locally, and a foldable iPhone is expected to feature in Ternus’s first launch event. IDC estimates the device could capture 40% of the foldable smartphone market by the end of 2027. Ternus’s first major public product cycle begins quickly: Apple’s next product event is scheduled for September 9, just eight days after he formally becomes CEO.
