Is It Safe? Apple Hype Masks Overvaluation

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Under Steve Jobs, Apple(AAPL) has become a commercial and cultural phenomenon. After all, Jobs introduced the world to the iPod and iPhone.

Since Jobs' January departure to tend to health concerns, Apple's stock has soared 68%. And with his expected return this week, many expect Apple to rally to even greater heights. Those expectations are probably exaggerated.

There's no doubt Apple has been wildly successful. With more than 1 million iPhone 3G S units sold since its release last month and rabid coverage of releases hyping products far more than any other ad campaign, logic suggests that the Apple machine won't slow anytime soon.

However, suggesting that Apple will become a better company now that Jobs has entered the building is irrational. Large companies are more like ocean liners than sports cars: Changes are slow and arduous. Strategic choices that have affected Apple's recent run were made most likely by Jobs and his team months, quarters or even years ago.

While Jobs has been out of commission for half a year, he hand-picked his successors. They are more than capable of keeping the lights on and implementing the business plan he created.

While Apple may not blast into the stratosphere with the gadget guru's return, it's still a solid investment. More than 39% of first-quarter revenue came from iPods and iPhones, lines with a high degree of turnover, leading to repeat sales.

With iPod and iPhone sales far outpacing other major launches, such as the Palm(PALM) Pre and BlackBerry Bold by Research in Motion(RIMM), investors have been licking their chops at the thought of juicy profits to come at Apple. Most of that is already priced into the shares, though.