A consumer electronics giant An apple (AAPL) has seen its shares take a hit this year on concerns about weakening macroeconomic conditions. But with Apple stock pulling back, many investors are wondering if AAPL stock is a buy right now.
Apple shares pull back from high
In intraday trading on Jan. 3, Apple briefly hit a $3 trillion market cap when its stock hit 182.86. Apple shares climbed as high as 182.88 that day before retreating. It was the first company to reach a market capitalization of $3 trillion.
On January 4, Apple’s stock once again hit the $3 trillion mark. It hit a record high of 182.94 before retreating. AAPL shares fell in the following weeks, but have tried to recover several times since then. Apple shares ended the regular session on August 26 at 163.62.
In August 2020, Apple became the first company to reach a market capitalization of $2 trillion.
The legendary history of Apple
Apple has been an American success story several times over. First, he ignited the personal computer revolution in the 1970s with the Apple II. He then reinvented the computer in the 1980s with the Macintosh.
Co-founder Steve Jobs returned to lead Apple in 1997 and led a winning streak of innovations that included the iMac, iPod, iTunes, iPhone, iPad and the App Store.
The biggest driver of Apple’s modern success is the iPhone. The game-changing smartphone, which debuted in 2007, sparked years of tremendous growth and created a loyal customer base willing to buy Apple products and services.
But iPhone sales have slowed as consumers keep their phones for longer periods between upgrades. However, the company is in the midst of a major upgrade cycle with its 5G iPhones.
Apple Stock News: iPhone 14 on deck
On June 6, Apple showed off the features of its upcoming operating systems for iPhone, iPad, Mac and Apple Watch on its Worldwide Developers Conference. It also introduced a second-generation Mac processor, the M2, which is available first in two new laptops, the MacBook Air and the MacBook Pro.
Apple shares ended the day up 0.5% on the news. Some kind of Wall Street analysts were unhappy from the event without surprises. They expected at least hints about the company’s rumored mixed-reality headset.
Earlier this year, on March 8, Apple held spring product launch event where it introduced a cheaper 5G iPhone. The third-generation iPhone SE is the company’s new entry-level 5G smartphone. It starts at $429.
The new iPhone SE joins the company’s second generation of 5G-enabled smartphones, the iPhone 13 series. These smartphones debuted in September 2021.
At the spring launch event, Apple also showed off a new high-end Mac computer for creative professionals. The Mac Studio desktop computer starts at $1,999. Apple also introduced a new version of its iPad Air tablet.
But investors were not impressed. Apple shares fell 1.2% on the day of the event.
The next catalyst for Apple stock could be hers fall product launch eventscheduled for September 7. Analysts say Apple will unveil its iPhone 14 series smartphones and Apple Watch Series 8 smartwatches at the event.
Apple’s opportunities for growth
As the iPhone business develops, investors wonder what the next big engine of growth will be for Apple stock.
Recently, two businesses have boosted Apple’s sales and profits: services and wearables.
In the June quarter, Apple’s services revenue rose 12% year over year to $19.6 billion. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade and other offerings.
However, some analysts are worried slowing growth of Apple’s services business.
Meanwhile, Apple faces antitrust scrutiny in US, Europe and Asia for App Store policies including 30% commission.
Apple product rumors continue
Sales of Apple’s wearables, home and accessories division fell 8% to 8.08 billion in the June quarter. Supply chain issues hurt the unit’s performance last quarter. This device includes wearables such as the Apple Watch, AirPods wireless headphones, and Beats headphones. It also contains the Apple HomePod Mini wireless speaker and other various gadgets.
The news leak suggests that Apple will announce a virtual reality and augmented reality headsets next January. The computer headphones could be a driver for Apple shares, analysts say.
Meanwhile, the speculation continues Apple is aiming to make a self-driving electric car.
Apple earnings: Solid rhythm
Late on July 28, Apple surpassed Wall Street’s targets for its own third fiscal quarter thanks to better-than-expected revenue from iPhone sales and services. He forecast sales growth to accelerate in the September quarter as supply chain issues eased. Apple shares rose 3.3% on the news in the next regular trading session.
Apple earned $1.20 per share on sales of $83 billion in the quarter ended June 25. Analysts polled by FactSet expected Apple to earn $1.16 per share on sales of $82.8 billion. On a year-over-year basis, Apple’s profits fell 8%, while sales rose 2%.
In the June quarter, iPhone sales rose 3% to $40.67 billion. Smartphones accounted for 49% of the company’s total sales for the period.
Apple’s Mac sales fell 10% to $7.38 billion. And iPad tablet sales fell 2% to $7.22 billion. Apple struggled with a shortage of Mac computers and iPad tablets during the quarter.
The company’s next earnings report won’t be until the end of October.
Exclusive Apple stock valuations
After hitting an all-time high in early 2022, Apple shares are down as much as 29%.
AAPL stock has Estimating the relative strength of IBD out of 89 out of 99. The relative strength rating shows how a stock’s price performance compares to all other stocks over the past 52 weeks.
Apple stock has IBD Composite Rating of 92 of 99, acc IBD Stock Check tool. IBD’s Composite Rating combines five separate proprietary ratings for fundamental and technical performance into one easy-to-use rating. The best growth stocks have a composite rating of 90 or better.
AAPL Stock Technical Analysis
On November 17, Apple’s stock exploded cup base with handle at a point of purchase from 153.26, IBD MarketSmith graphs show. But after rising 19%, it gave up all those gains in the bear market.
Over the past 34 weeks, AAPL stock has been consolidation with a buy point of 183.04, acc IBD MarketSmith diagrams.
However, with a recent pullback, Apple shares have been forming handle with a new buy point of 176.25.
In a positive sign, Apple shares are once again trading above theirs 50-day moving average, as well as its 200-day line. Also, its relative strength line is rising as it outperforms the S&P 500.
Also, Apple stock has IBD accumulation/spread rating by B, indicating institutional buying of shares.
Is Apple stock buying right now?
Apple stock isn’t buying right now, but it could be soon. However, with the current uptrend in the market under pressure, investors should be cautious.
Keep an eye on the overall stock market. If the market turns south, don’t try to fight the general direction of the stock market. Take a look The IBD Big Picture column about the current direction of the market.
To find the best stocks to buy and watch, take a look IBD stock listings page. More stock ideas can be found at IBD’s ranking, MarketSmith and SwingTrader platforms.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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