During its rise to become a dominant tech enterprise, Apple (AAPL 1.59%) has certainly made its early investors some serious money. In the past two decades, shares have generated a total return of greater than 18,000%, boosted by the introduction of popular hardware devices and services.

If you had been fortunate enough to make just a $5,500 investment in the business in March 2005, you'd be sitting on a seven-figure sum today. The bulls hope the future can offer a similar reward.

Could Apple be a millionaire-maker stock?

Incredible competitive position

There's no valid argument that points to Apple not being a fantastic business. It all starts with the brand and its position in the market, which is recognized for high-quality, innovative, and easy-to-use offerings. Apple is also a premium brand, supported by in-demand hardware devices that see solid global demand.

The company possesses pricing power, although it might not be as obvious as it has been in previous years. For its newest iPhone models, Apple charges four-figure sums. And there probably wouldn't be too much consumer pushback if the prices rose slightly more.

Hardware is crucial to Apple's story. However, software and services are becoming increasingly important. In the fiscal 2025 first quarter, 21.2% of sales came from this source, a proportion that has increased over time. And this segment produces a stellar 75% gross margin, much better than hardware.

Services are also critical to Apple's competitive position in a different way. They help create the company's powerful ecosystem, which is the invaluable combination of products and services that keep customers locked in. The legendary Warren Buffett demonstrated this favorable position by arguing that if you offered someone $10,000 with the condition that they could never use an iPhone again, that person would probably decline.

Apple is one of the most financially sound companies on Earth. It generated a jaw-dropping $36.3 billion in net income in Q1. This profitability results in sizable free cash flow.

Management returns a lot of this to shareholders. In the last three months, Apple paid $3.9 billion in dividends and repurchased $23.6 billion worth of its outstanding shares.

Weak return prospects

There's no shortage of reasons to like this business. Apple has become such a dominant force for a reason, and investors should at least keep the company on their watchlists. It's also a nice vote of confidence that Buffett-led Berkshire Hathaway still owns 300 million shares.

But I don't believe this stock is a millionaire maker. The current valuation is a major headwind. As of this writing, shares trade at a price-to-earnings (P/E) ratio of 37.8. In the past 10 years, the P/E multiple has averaged 22.9, so the setup right now isn't attractive by any stretch of the imagination.

Paying that valuation makes sense if Apple can produce strong growth. However, this likely won't be the case. According to Wall Street consensus analyst estimates, the company's revenue and earnings per share are projected to increase at compound annual rates of 6.6% and 10.6%, respectively, between fiscal 2024 and fiscal 2027. That's nothing to write home about.

With an annual sales base approaching $400 billion, it's difficult to move the needle. Plus, consumers aren't rushing to upgrade to the newest devices like they have in the past.

Not only do I believe Apple isn't a millionaire-maker stock, I'm not confident it can outperform the broader S&P 500 in the years ahead, either. The best thing investors can do is wait until there's a much more compelling buying opportunity.