Apple Stock Is Interesting, But Here’s What To Buy Instead

Shares of the tech giant Apple (NASDAQ: AAPL) they have made a respectable 11.6% market return over the past six months, outpacing the market’s 5.8% jump. S&P 500 index over the same period.

“Magnificent Seven” stock benefits from robust demand for its latest iPhone offering. Strong iPhone sales helped Apple’s revenue in the first quarter of fiscal 2026 rise 16% from the year-ago period to nearly $144 billion, while adjusted earnings per share rose 19%.

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Apple may continue to outperform the broader market in the future thanks to the growing adoption of generative AI smartphones, as well as the strong performance of its high-margin services business. However, there may be a better way to capitalize on the growth of the AI ​​smartphone market: the supplier Apple Cirrus Logic (NASDAQ: CRUS).

Let’s see why that might be the case.

Cirus Logic’s stock has jumped 33% in the past six months, almost double the gains posted by Apple’s stock during this period. It is worth noting that Apple is Cirrus’ largest customer, accounting for 94% of the latter’s revenue in the third quarter of fiscal 2026 (which ended on December 27, 2025).

Cirrus provides audio codecs, haptics, power management, and camera controller chips for smartphones. The chip company’s reliance on Apple is proving to be a catalyst for the stock. Cirrus shares jumped more than 8% after the release of its latest quarterly results on February 3.

Investors praised the company’s better-than-expected results, as Cirrus’ revenue exceeded the higher end of its guidance due to “stronger-than-expected demand for components shipping in smartphones and a favorable mix of end devices.” Cirus revenue rose 4.4% year over year, while the stronger product mix led to an 18% jump in earnings to $2.97 per share.

The company is ready to end the current fiscal year with a 20% increase in earnings to $9.05 per share, which exceeds the average growth of 16% that S&P 500 companies are estimated to follow. Additionally, Cirrus is currently trading at 19 times earnings. That’s a discount to the S&P 500’s average earnings multiple of 25.

In addition, Cirus stock is significantly cheaper than Apple’s as well, which trades at nearly 35 times earnings. Because Cirrus can be considered a proxy for Apple due to its almost total dependence on the latter for its income, and its earnings growth was almost in line with the technological giant in the previous quarter, it is a better value play.

Dan Ives of Wedbush Securities pointed out last year that Apple’s iPhone shipments in the current fiscal year could fall well ahead of Wall Street’s estimate of 230 million units. The tech giant could end up shipping as many as 250 million iPhone units in fiscal 2026, primarily because about 315 million iPhones haven’t been upgraded in the past four years.

However, the large number of users in the update window suggests that Apple may exceed Ives’ estimate of 250 million. That’s probably why analysts have become bullish on Cirrus’ growth prospects.

Cirrus’ increased growth could lead the market to reward it with higher earnings multiples, paving the way for more upside. That’s why it would be a good idea to buy this technology stock right now.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Cirrus Logic. The Motley Fool has a disclosure policy.

Apple stock is interesting, but here’s what to buy instead was originally published by The Motley Fool