Opinions
Stockchase Insights
Apple Inc
AAPL-Q
HOLD
Jan 22, 2025
Stock price when the opinion was issued
You might be interested:
Global tech behemoth. His son always tells him that it's all about the ecosystem. That's what drives customer loyalty and recurring revenue. Innovation continues to drive earnings and customer loyalty. Services are where it's at on a go-forward basis. Apple Music is very high margin and recurring revenue, offsets sporadic cyclicality in hardware sales.
AI initiatives offer good growth potential. Balance sheet is bigger than many countries combined. FCF generation very strong. Shareholder friendly initiatives. Sees 15% earnings growth going forward. High, high quality for long-term investors. Yield is 0.4%.
Will be fine, if they could work with other companies to build AI into their products. Does it matter to earnings if they aren't the first out of the gate with applying AI? Not really. What matters is they make the best version of whatever anyone has made in the past three years.
It leads the Mag 7 this week. The quarter was fine. In response to tariffs, they are moving some supply chains to Indonesia and Indian, away from China. Chinese phones are taking market share, but we've gotten past this news. Apple services were +14% this quarter and beat the top and bottom with an 8% growth rate. He will ride it up.
The ones that are nice to King Trump. He'd hope that TSLA and AAPL would escape additional tariffs on China.
Except for TSLA, the other Mag 6 have come down to very reasonable valuations. For example, AMZN's trading at a discount to WMT, which makes no sense. GOOG is trading at 19x earnings. Thinks AAPL growth will be double digit. This is your chance to buy quality companies at reasonable valuations. See his Top Picks.
Our PAST TOP PICK with AAPL has triggered its stop at $212. To remain disciplined we recommend covering the position at this time. When combined with our previous guidance, this will result in a net investment gain of 25%.
It has been a big selloff for AAPL over the past few weeks, as some analysts have downgraded the name and lowered their targets. Its growth profile has slowed, but it continues to be one of, if not the the strongest hardware companies in the world, and consumers continue to rely on their products. It is expensive on a valuation basis, but its recent price drawdown is not out of the norm for the name, and it continues to compound its share price at a good rate. It has a 3% buyback yield, and we could see some potential for upside growth surprises with its AI products or services segment in the future. We would be comfortable continuing to hold the name, given its industry strength and immense cash position.
Unlock Premium - Try 5i Free