Apple isn't worth its near-$3 trillion valuation - and its stock has only surged this year because it's a safety play, CIO says

• Apple isn't worth its current valuation, according to Short Hills managing partner Steve Weiss.
• Shares have jumped 42% in 2023, putting a $3 trillion market capitalization within reach.
• “The stock has not moved up in the fundamentals, it’s moved up because it’s safety,” Weiss said.

Apple isn't worth its current near-$3 trillion valuation - but is pulling in investors' cash all the same because it's a safety play, according to Short Hills Capital Partners' CIO who doesn't own any shares in the company.

Steve Weiss, who manages money for billionaire Carolina Panthers owner David Tepper's family office, said Tuesday that the underlying fundamental numbers don't support the tech giant's surge this year.

"Obviously, I should own it - shouldn't have sold it, but hindsight is always 20/20," he told CNBC's "Halftime Report". "The stock has not moved up in the fundamentals, it's moved up because it's safety."

"Part of it is sour grapes that I don't own it - but frankly, it just doesn't deserve the multiple that it has on the fundamental financial performance," he added.

Apple shares have jumped 42% in 2023, with investors piling into a narrow group of mega-cap tech stocks that have been responsible for nearly all the benchmark S&P 500's gains this year.

That surge has lifted the company's valuation from $2.1 trillion to $2.9 trillion, according to data from CompaniesMarketCap.

The tech conglomerate's second-quarter earnings report, published May 4, showed revenue falling 3% to $95 billion year-on-year, dragged down by lower iPad and Mac sales.

Apple's earnings-per-share also fell from $1.88 to $1.52 quarter-on-quarter - and analysts expect that figure to slip to $1.19 for the three months ending June 30, according to Refinitiv.

For Weiss, those metrics suggest that the stock's main appeal to investors is as a safety play - meaning it's expected to deliver steady, market-beating returns in times of economic uncertainty.

"There's nothing wrong with owning the stock for those reasons," he told CNBC.

"But clearly, if you took the name Apple off of it and looked at the financial performance of what their revenue growth is, what their earnings-per-share growth is, it wouldn't be deserving of this multiple," he added, referring to the fact Apple is currently trading at a price that's 32 times its annual earnings per share.

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