The risk in Apple's stock that nobody is talking about

Apple (NASDAQ: AAPL) stock has quietly been one of 2026's top-performing stocks. It's up around 20% so far this year, outperforming many other big tech peers. In fact, it isn't that far away from retaking the title of world's largest company from Nvidia (NASDAQ: NVDA). Currently, Nvidia is a $4.9 trillion company, while Apple sits at $4.8 trillion. However, there's a hidden risk with Apple's stock that nobody is talking about: valuation.

Most of Apple's share price growth in recent years has come from investors being willing to pay more for its sales and earnings, not from actual improvements in its business performance. This could be a major issue, because Apple may have some emerging problems on its hands.

Apple's stock is expensive

Apple has a track record of being one of the most consistently performing companies in the market, which should earn its shares a bit of a premium price tag. However, how much is too much? Apple shares trade for nearly 40 times trailing earnings, and 37 times forward earnings.

For comparison, the S&P 500 (SNPINDEX: ^GSPC) trades at 25.5 times trailing earnings and 21.5 times forward earnings. That means from a forward earnings standpoint, investors are paying nearly twice as much for Apple as they are for the average stock. Those are huge expectations to live up to, and there are reasons for investors to worry about whether it can.

Apple is about to face one of its biggest crises in recent memory: soaring commodity prices. The data center build-out has eaten up the production capacities of many of the companies that also make components for Apple's products. For example, there's now a shortage of memory chips, and their prices have soared dramatically as a result.

To compensate for its higher costs, Apple may have no choice but to start raising its iPhone prices, which may be poorly received among a consumer base that's already stretched financially thin. This could make maintaining margins difficult. Meanwhile, the company is also dealing with poor sales growth. The combination of all these factors may cause Apple's profits to fall, which would make Apple's already-pricey stock look even more expensive.

I think this is a precarious setup for shareholders. Apple's stock is priced for perfection in a business where the environment is starting to worsen. There are many big tech stocks that are growing faster than Apple and trading at premiums far lower.

Take Nvidia, for example. The peak of the AI build-out still hasn't hit yet, and the chipmaker is still growing its revenue at an 85% year-over-year pace and trading at just 22.6 times forward earnings. Apple's stock has gotten far too expensive, and it's a risk that investors must know about, because they could get burned.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.