Chipotle Outperforms Apple: A Better Investment Opportunity
Financial Performance Comparison
Apple (NASDAQ: AAPL) and Chipotle Mexican Grill (NYSE: CMG) are both investor favorites, yet they face challenges like tariffs and consumer uncertainty. Currently, Chipotle is positioned as the better investment.
Chipotle has shown more stable revenue growth, expanding by 14.5% annually over the past five years. In contrast, Apple’s revenue growth has declined, witnessing a drop of 2.8% in 2023.
For 2025, Chipotle reported a 6.4% increase in revenue for Q1 and a 7.7% rise in earnings per share to $0.28. Apple experienced a 5% revenue growth in its second fiscal quarter, with 8% earnings growth to $1.65.
On a trailing basis, Chipotle has a higher price-to-earnings (P/E) ratio of 44.8 compared to Apple’s 31.2, but this doesn’t negate Chipotle’s overall better value.
Company Maturity and Growth Phases
Apple, as a mature tech giant, has a wide reach with its iPhone, iPad, and Mac products. Its future growth relies on innovations in saturated areas like services. Competing in streaming services like Apple TV+ is becoming increasingly difficult.
In contrast, Chipotle is still expanding rapidly, with plans for fewer than 4,000 locations in North America and ambitions to enter the Mexican market by early 2026. This growth potential provides Chipotle with significant opportunities on an international scale.
Impact of Global Events
Current tariff discussions are critical, especially as President Trump has threatened a potential 25% tariff on Apple unless production is brought back to the U.S. Given the iPhone’s role in Apple’s revenue, these developments are concerning.
In comparison, Chipotle enjoys a level of insulation from the challenges affecting the tech sector. While it may face some food supply issues, it is not directly impacted by tariffs targeting technology.
Chipotle acknowledged earlier this year that it would absorb rising costs instead of passing them on to consumers, which could dampen profit potential. Nonetheless, it anticipates positive comparable restaurant sales for the year.
Conclusion
In summary, food demand remains consistent, unlike premium tech products that require expensive upgrades. Although Apple is a leading tech company, its rapid growth may be waning. Chipotle, however, is agile, has passionate customer loyalty, and continues to tap into new markets.
Investment Considerations
Before investing in Chipotle Mexican Grill, note that analysts have identified other stocks as more promising opportunities currently.
For instance, Netflix and NVIDIA were previously highlighted as top stocks and have yielded substantial returns since their recommendations.
Consider these historical performances while evaluating Chipotle’s potential in your investment strategy.
David Butler holds no positions in any mentioned stocks. The Motley Fool has investments in and recommends Apple and Chipotle Mexican Grill.
The opinions expressed in this document are those of the author and do not necessarily reflect those of Nasdaq, Inc.
