Prediction: Apple Stock Will Crush the S&P 500 in Its New CEO’s First Year

Apple (NASDAQ:AAPL | AAPL Price Prediction) CEO Tim Cook is less than two months away from handing over the reins to John Ternus, a move that investors now seem to have come to terms with. Of course, it’s going to be hard to match Tim Cook’s track record when it comes to the appreciation throughout his tenure. That said, as Apple moves back to a products guy, there’s every reason for investors to be excited despite the anxiety that comes with transitioning to a new top boss.

As Mr. Cook stays on as chairman, I do think there’s an opportunity for Apple to get the best of both worlds, as Apple looks to continue its success but in a different way as AI sets the tone for the firm’s future. Apple might have been slow to start sprinting in this AI race, but, in my view, it’s more of a marathon than a 100-meter dash. And, with that, Apple might be wise to take its time, especially given how fast things are changing in the AI waters.

The best of both worlds

As hyperscalers scale up, spending hundreds of billions, Apple seems to be more than willing to follow a different script.

Under its incoming CEO, John Ternus, I do think that this strategy, as well as the man’s product expertise, could help shares of Apple continue going strong for years to come as it looks to reclaim the title of world’s largest company by market cap.

With tariff threats, regulatory uncertainties, and component shortages to grapple with (RAM-mageddon has been a real phenomenon), Mr. Cook still brings plenty to the table. And, with that, I suspect Apple will still have what it takes to navigate an incredibly turbulent patch of waters that would have sunk most other ships out there.

As Mr. Cook defends the firm from blows by outside forces, Mr. Ternus, a man who’s known to roll up his sleeves and build the products that define the company’s trajectory in this AI era.

John Ternus is the perfect top boss for the AI era

Undoubtedly, putting AI on a device is where Apple could score ample AI spoils at a fraction of the cost. Of course, it’s one thing to spend massive sums of cash to advance the effort, but it’s another thing entirely to deliver breakthrough innovations that reshape the race. While time will tell if AI is going to move from cloud-first to device-first, I do think that recent efforts might allow Apple to rise above the pack as the firm that not only did AI differently, but correctly.

With WWDC 2026 unveiling some very impressive Apple Foundation Models alongside other edge AI innovations that the market may have discounted, I do think that Apple’s AI strategy is starting to look a lot more impressive compared to what other Mag Seven firms are doing. That’s probably part of the reason why Apple stock has been gaining traction in recent weeks despite having to raise prices on iPads and Macs due to higher DRAM and NAND costs.

In 2026, the first full year with John Ternus at the helm, we might witness Apple not only outpacing the S&P 500 but also much of the Mag Seven. And, of course, it’s not just about John Ternus. Rather, it’s more about the stage that’s been set in the many years prior.

John Ternus is taking over ahead of what could be a historic year for Apple

While Mr. Ternus is a very capable executive and perhaps the perfect man to succeed Cook, there’s no question that he’s taking control at a time when Apple is absolutely firing on all cylinders, with what could be one of the biggest product years in recent memory.

With a foldable iPhone, big upgrades are in store for the iPhone 18 Pro, a big redesign in iPad, new camera-equipped AirPods, AI glasses, and a slew of other products with supercycle potential; there’s no question that Mr. Ternus could look good right off the bat.

The big kicker is Siri AI and how it could push consumers to upgrade their slate of products in spite of higher costs tied to higher input costs. Apple is using innovation to command pricing power, and I do think it’s going to work, especially as the company has its most eventful year yet across hardware, software, and services.

Finally, I think there’s the underpriced upside to be had from a true AI breakthrough. With recent reports swirling around Apple’s talks with startup PrismML, which managed to shrink a large model to run on-device, perhaps there’s room to shock and awe in a way that only Apple can.

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