Over the past few years, Apple (AAPL) stock has experienced an incredible run, ranking as the best-performing FAANG stock in 2019 and 2020. As a result of falling less than its tech peers during the overall market collapse, it regained the title in 2022. Though other FAANG stocks have either reached or are about to reach record highs, Apple’s returns in 2023 lagged behind those of its peers in the FAANG space, and it has the dubious distinction of being in the red this year.
As a matter of fact, Apple’s stock is currently trading near its 52-week lows and at its lowest point since October. We’ll talk about why Apple stock is declining in this article and whether you should purchase the dip.
Apple (AAPL) is a leading technology company known for its innovative products and services, including the iPhone, iPad, Mac, and Apple Watch. The company has a strong track record of growth and profitability, but it also faces several challenges In this article, we will analyze Apple’s current situation and discuss whether its stock is a buy right now.
Challenges Facing Apple
Apple faces several challenges that could impact its future growth. These challenges include:
- Antitrust lawsuit: The U.S. Department of Justice has filed an antitrust lawsuit against Apple, alleging that the company is using its dominant market position to stifle competition. This lawsuit could result in significant fines and changes to Apple’s business model.
- Weak iPhone sales in China: iPhone sales in China have been declining in recent years due to increased competition from local smartphone makers. This is a major concern for Apple, as China is the world’s largest smartphone market.
- Legal problems over App Store policies: Apple has been facing legal challenges in Europe and Asia over its App Store policies, including its 30% commission fee. These challenges could lead to changes in Apple’s App Store business model, which is a significant source of revenue for the company.
- Lack of a strategy for artificial intelligence: Apple is playing catch-up with other tech giants in the field of artificial intelligence (AI). This could put Apple at a disadvantage in the future, as AI is expected to be a major driver of growth in the technology industry.
Opportunities for Growth
Despite the challenges it faces, Apple also has several opportunities for growth. These opportunities include:
- Services: Apple’s services business, which includes the App Store, Apple Music, and Apple TV+, is growing rapidly. This business is less cyclical than Apple’s hardware business and could provide a more stable source of revenue in the future.
- Wearables: Apple’s wearables business, which includes the Apple Watch and AirPods, is also growing rapidly. This business is expected to continue to grow as more people adopt wearable devices.
- New products: Apple is constantly innovating and developing new products. The company is expected to launch several new products in the coming years, which could drive further growth.
Apple Stock Analysis
Apple’s stock price has been volatile in recent years. The stock reached an all-time high of $199.62 in December 2023 but has since fallen to around $169.58.
Technical Analysis
Apple’s stock is currently trading below its 50-day moving average line. Its relative strength line has also been falling lately, indicating that it is underperforming the S&P 500 index.
Fundamental Analysis
Apple has a strong financial position. The company has a large cash balance and low debt levels. Apple also has a high return on equity (ROE) and a strong track record of earnings growth.
Is Apple Stock a Buy Right Now?
Based on our analysis, we believe that Apple stock is a hold right now. The company faces several challenges, but it also has several opportunities for growth. We believe that the risks and rewards are balanced at the current price.
Apple is a leading technology company with a strong track record of growth and profitability. However, the company faces several challenges that could impact its future growth. We believe that Apple stock is a hold right now. Investors should carefully consider the risks and rewards before making an investment decision.
Disclaimer
I am an AI chatbot and cannot provide financial advice. The information provided in this article is for general knowledge and informational purposes only, and does not constitute professional financial advice. It is essential to consult with a qualified financial advisor before making any investment decisions.
Should You Buy the Dip in Apple Stock?
Apple is currently trading at a forward price-to-earnings (PE) multiple of about 25, reflecting a correction in the company’s valuation multiples. 7x. Out of the “Magnificent 7,” its NTM PE multiple is the third-lowest; the only company trading at a substantially lower multiple is Alphabet (GOOG).
Interestingly, even Meta Platforms (META), which has historically sold for a large premium over Apple, is now trading at comparable multiples.
Even though I think Apple’s valuation should support these prices, the company needs to find a way out of the situation where its growth on both the top and bottom lines is declining. Apple might need to create its own “year of efficiency,” similar to Meta Platforms, in order to turn around its financial situation. Although Apple also made efforts to reduce costs, they weren’t as extensive as those made by Meta or even Amazon (AMZN).
The other thing that Apple needs to do is to find a way to return to top-line growth. Apple might unveil new products or enhancements to its existing portfolio at the Worldwide Developers Conference (WWDC), which is scheduled for June 10-14. Apple seems to have read the writing on the wall, and reports suggest that it might showcase the iOS 18 with AI capabilities at the event.
Apple needs to convince markets that it is not lagging behind its tech peers in incorporating AI across its different products. While AAPL still might not see an Nvidia-caliber rally, this would at least help it play catch-up in terms of the “AI boom.”
All things considered, Apple needs to increase both revenue and profitability, and a significant iPhone upgrade with improved AI capabilities might just be the ticket. Based on Apple’s extensive history of innovation, I don’t see any reason why the company can’t develop compelling artificial intelligence innovations for its portfolio in the near future. As a result, given the fair prices, I plan to purchase the dip.
As of the publishing date, Mohit Oberoi held positions in AAPL, AMZN, META, NVDA, and BRK. B , TSLA , NKE . This article’s data and information are all provided purely for informative purposes. For more information please view the Barchart Disclosure Policy here.
This article represents the author’s views and opinions, which may not necessarily represent those of Nasdaq, Inc.
This data feed is not available at this time.
We’re sorry, we are currently experiencing some issues, please try again later.
Our team is working diligently to resolve the issue. Thank you for your patience and understanding.
Over the past few years, Apple (AAPL) stock has experienced an incredible run, ranking as the best-performing FAANG stock in 2019 and 2020. As a result of falling less than its tech peers during the overall market collapse, it regained the title in 2022. Though other FAANG stocks have either reached or are about to reach record highs, Apple’s returns in 2023 lagged behind those of its peers in the FAANG space, and it has the dubious distinction of being in the red this year.
As a matter of fact, Apple’s stock is currently trading near its 52-week lows and at its lowest point since October. We’ll talk about why Apple stock is declining in this article and whether you should purchase the dip.
Is Apple Stock In Trouble?
FAQ
Is Apple a buy or sell right now?
Are Apple stocks expected to rise?
Can Apple stock reach $1,000?
What is Apple stock prediction for 2025?
Is Apple a good stock to buy in Omaha?
The Oracle of Omaha loves to make big bets on companies with strong brands, especially if those brands can produce high margins and keep growing over the long term. Apple possesses these qualities in spades. Apple stock isn’t going to appreciate by 48% every year, but the blue chip stock can deliver solid returns over many years.
Should you buy Apple stock?
Investors have banked on the growth in the services business to make the case to buy Apple stock. Services include app sales, subscriptions, and AppleCare warranty plans and the segment generates higher margins than the iPhone and other devices.
Should you buy apple or Microsoft stock?
Microsoft stock costs 14 times revenue, by contrast, and Amazon is available at 3.4 times sales, its highest valuation to date in 2024. If you’re worried about slowing growth, then you could choose to watch Apple shares from the sidelines in favor of some more successful members of the Magnificent Seven.
Who founded Apple Inc?
The company was founded by Steven Paul Jobs, Ronald Gerald Wayne, and Stephen G. Wozniak in April 1976 and is headquartered in Cupertino, CA. AAPL | Complete Apple Inc. stock news by MarketWatch. View real-time stock prices and stock quotes for a full financial overview.