Good News for Apple and Tesla Could Be Bad News for the Overall Market
Last week saw two major news items, one on Apple (AAPL) and one on Tesla (TSLA). For Apple it was the news that the company became the first company ever to reach a market cap of $2 trillion. For Tesla it was the fact that company’s market cap had exceeded the market cap of Walmart (WMT).
When I saw the news on Apple, one of the first things I did was look up when the company exceeded $1 trillion in market cap. It was on August 28, 2018. That info jumped out at me because September ’18 was when we saw volatility start to increase and then we saw the huge selloff in the fourth quarter that year.
I did an interview with S&P Global on the matter last week with Anna Akins. As I told her, I’m not arguing whether Apple should be worth $2 trillion or not, if any company has that value right now it would be Apple. The company has seen tremendous earnings and revenue growth in recent years and it has an incredibly loyal clientele. My concern is that the entire market is overvalued right now.
For Tesla, the rise has been more meteoric as we have seen the stock price jump from below $400 in March to over $2,000 now. The company is doing a 5-for-1 stock split on August 31 with a record date of August 21. So if you owned the stock on August 21, you will be swapping one share for five shares and that will bring the stock price back down near the $400 level.
The issue I have with Tesla exceeding Walmart’s market cap concerns the two companies and their ability to generate revenue. No company in the world generates more revenue than Walmart—approximately $550 billion per year. Tesla is expected to generate revenue of almost $30 billion in 2020 and $40 billion in 2021. Walmart generates $30 billion in income in approximately 20 days when it takes Tesla a year to generate that amount of income.
My concern about these two news items is that they represent the overall thirst for speculative investments. One sentiment indicator for the overall market is flashing a warning sign right now too. The Investors Intelligence Bull/Bear ratio is at 3.59 currently and that is the highest reading we have seen since the beginning of 2018. That’s when the market fell after the trade war with China really got heated up.
If we look at the Tickeron scorecards for Apple and Tesla, both companies get a “strong buy” rating. These ratings are based primarily on technical analysis factors and both have three bullish signals on that side of the equation. Tesla has one bearish signal while Apple doesn’t have any bearish technical indicators.
The fundamentals are a much different story. Apple has four bullish indicators and only one bearish indicator. Tesla only has one bullish indicator and it has three bearish indicators on the fundamental side.
Looking at the fundamental analysis screener, the only negative mark for Apple is the Valuation Rating, meaning that the company is likely overvalued at this time. For Tesla it gets a score of 99 in the Valuation Rating. That is the worst possible score a stock can get. The company also gets a score of 99 in the SMR Rating category and once again that is the worst possible score. The other negative mark comes in the Seasonality Score where it shows a 75% chance of a decline.
On the technical analysis screener, the one negative indicator for Tesla is the Bollinger Bands. The stock moved above the upper band early last week. We also see that both Apple and Tesla have been overbought for a number of days based on their stochastic indicators and the RSI.
The stochastic indicators and the RSI in the screener are the daily ones, but if you look at the weekly and monthly ones, those are overbought as well.
I am not suggesting that investors should rush out and short Apple and Tesla. The bullish momentum is far too strong at this point in time. What I am suggesting is that the overall market may be setting up for a selloff because the optimism around the market is just too high, too euphoric. Apple’s market cap hitting $2 trillion could be a sign of overall market optimism. Tesla’s market cap could be a sign that investors are making riskier investments than they normally would.
Too much optimism is usually a sign of a market top.
AAPL's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for AAPL turned positive on October 23, 2025. Looking at past instances where AAPL's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 20, 2025. You may want to consider a long position or call options on AAPL as a result. In of 75 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AAPL advanced for three days, in of 347 cases, the price rose further within the following month. The odds of a continued upward trend are .
AAPL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 306 cases where AAPL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for AAPL moved out of overbought territory on October 09, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 46 similar instances where the indicator moved out of overbought territory. In of the 46 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AAPL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. AAPL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: AAPL's P/B Ratio (59.172) is very high in comparison to the industry average of (4.386). P/E Ratio (39.882) is within average values for comparable stocks, (31.707). Projected Growth (PEG Ratio) (2.521) is also within normal values, averaging (2.018). Dividend Yield (0.004) settles around the average of (0.027) among similar stocks. P/S Ratio (9.709) is also within normal values, averaging (259.582).
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a manufacturer of mobile communication, media devices, personal computers, and portable digital music players
Industry ComputerPeripherals
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