Tech giant Apple has seen a nice run-up this year. Shares have risen more than 15% year to date as of this writing. Bidding up the stock in 2024, investors seem convinced the company could benefit from its innovations in artificial intelligence (AI). While the iPhone maker might see a solid upgrade cycle for its new iPhones this year thanks to AI, this doesn't automatically make the stock a buy. Valuation matters, too, and the stock's valuation is looking quite pricey.

Of course, that doesn't necessarily make the stock a sell, either. Indeed, if I had to categorize the stock as either a buy, sell, or hold, I'd probably call it a hold. A top-notch business: There's no denying that Apple sets a high standard in business. On its approximately $386 billion in trailing-12-month revenue, for instance, the company generated an astounding $104 billion in free cash flow.

This, combined with the company's war chest of cash ($153 billion at the end of its most recent quarter), enabled it to buy back an incredible $96 billion worth of its own stock over this same period. And this is on top of the $15.1 billion it spent on dividends. Extraordinary! Powering these impressive financials is an integrated ecosystem of hardware, software, and services its customers love. Apple's loyal customer base means the company can charge high prices relative to its product costs, evidenced by its trailing-12-month gross profit margin of 46%.

Even more, while Apple's iPhone sales may be its bread and butter and its various products may be what the company is best known for, its services business is growing faster than its overall business and boasts a gross profit margin of 74%. Driven primarily by App Store sales and subscriptions and the company's ever-expanding suite of native services, like Apple TV, AppleCare, iCloud storage, and Apple Pay, this lucrative segment will likely grow as a percentage of revenue over the long haul, making the company even more profitable.

This segment will likely provide the tech company with an engine for sustainable long-term growth. 2 reasons to be cautious: Despite all of these amazing facets of Apple's business, there are two reasons investors should be cautious about buying the stock today. First, Apple isn't the fast-growing company it used to be. Total revenue rose 5% year over year in its most recent quarter. Sure, earnings per share rose 11% year over year with the help of margin expansion and share repurchases, but such low top-line growth is still a cause for concern.

Second, Apple stock's price-to-earnings ratio of about 34 today arguably already prices in strong growth for years to come. Even if the tech company continues growing its top line at current rates for the next decade, shareholder returns may be underwhelming at this valuation. Still, given how great Apple's business is, shares are probably more of a hold than a sell today. After all, a quality business like this is probably more likely to surprise to the upside than the downside.