Apple Stock A Buy now? The AAPL stock chart shows it
Apple (AAPL) in January became the first company to reach a market capitalization of $3 trillion. But with Apple stock pulling back after hitting that milestone, many investors are wondering if AAPL stock is a buy right now.
Apple stock falls from a high
In intraday trading on January 3, Apple briefly hit a market value of $3 trillion when its shares hit 182.86. Apple stock climbed as high as 182.88 on the day before falling back.
On January 4, Apple stock once again hit the $3 trillion mark. It hit a record high of 182.94 before falling back. AAPL stock trended lower in the weeks that followed, but has attempted to rebound several times since then. Apple stock closed the regular April 14 session at 165.29.
In August 2020, Apple became the first company to reach a market capitalization of $2 trillion. Microsoft (MSFT) hit the $2 trillion milestone in June 2021. And Google’s parent company Alphabet (GOOGL) followed in November.
Apple’s Rich History
Apple has been an American success story many times over. First, it sparked the personal computer revolution in the 1970s with the Apple II. Then he reinvented the PC in the 1980s with the Macintosh.
Co-founder Steve Jobs returned to lead Apple in 1997 and oversaw a string of winning innovations, including the iMac, iPod, iTunes, iPhone, iPad, and App Store.
The biggest driver of modern Apple success is the iPhone. The groundbreaking smartphone, which debuted in 2007, sparked years of massive growth and created a loyal base of customers eager to purchase Apple products and services.
But iPhone sales have slowed as users keep their handsets for longer periods between upgrades. However, the company is in the midst of a major upgrade cycle with its 5G iPhones.
Apple Stock News: Spring Launch Event
On March 8, Apple held a spring product launch event where it showed off a lower-cost 5G iPhone. The third-generation iPhone SE is the company’s new entry-level 5G smartphone. It starts at $429.
The new iPhone SE handset joins the company’s second-generation 5G-enabled smartphones, the iPhone 13 series. These smartphones debuted last September.
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. Additionally, Apple introduced a new version of its iPad Air tablet.
But investors were not impressed. Apple stock fell 1.2% on the day of the event.
Apple likely won’t announce any new products or services until its Worldwide Developers Conference this summer. Apple WWDC is scheduled as an online event from June 6-10.
Apple Growth Opportunities
With the iPhone business maturing, investors are wondering what will be the next big growth driver for Apple stock.
Two businesses have driven Apple’s sales and earnings of late: services and wearables.
In the December quarter, Apple’s Services revenue grew 24% year-over-year to $19.5 billion. Services include App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade and other offerings.
In March, Apple TV+ became the first video streaming service to win the Best Picture Oscar. His film “CODA” won first prize at the 2022 Oscars.
Meanwhile, Apple is facing antitrust scrutiny in the US, Europe and Asia for its App Store policies, including its 30% commission fee.
Apple product rumors persist
Apple’s Wearables, Home and Accessories unit saw sales rise 13% to $14.7 billion in the December quarter. This unit includes wearables like the Apple Watch, AirPods wireless headphones, and Beats headphones. It also contains the Apple HomePod Mini wireless speaker and other miscellaneous gadgets.
News leaks suggest that Apple will announce a headset for virtual reality or augmented reality later this year. The computer headset could be a driver of Apple stock, analysts say.
Meanwhile, speculation continues that Apple is looking to make a self-driving electric car.
Apple Earnings: the big holiday quarter
Late on January 27, Apple easily exceeded Wall Street targets for its first fiscal quarter ending December 25. It also forecast “solid” year-over-year sales growth for the March quarter. Apple stock jumped 7% on the news.
Apple earned $2.10 a share on sales of $123.9 billion during the holiday quarter. Analysts had expected Apple to earn $1.90 per share on sales of $119 billion, according to FactSet. Year-over-year, Apple’s profits rose 25% while sales soared 11%.
In the December quarter, iPhone revenue increased 9% from the same period last year to $71.6 billion. Apple’s iPhone business accounted for 58% of total revenue for the period.
Apple’s Mac computer sales rose 25% to $10.9 billion. Meanwhile, the company’s iPad tablet business lagged, with sales down 14% to $7.2 billion.
Tablet production was the hardest hit by chip shortages in the December quarter, Apple said.
The next catalyst for Apple stock could be the company’s second-quarter earnings report. Apple plans to announce its March quarter results on April 28. Analysts expect the company to take the opportunity to increase its quarterly cash dividend and share buyback plans.
Exclusive Apple Stock Valuations
After hitting its all-time high in early 2022, Apple stock is down 18%. It mostly trended sideways in the turbulent market.
AAPL stock has an IBD Relative Strength Rating of 85 out of 99. The Relative Strength Rating shows how a stock’s price performance compares to all other stocks over the past 52 weeks. His current RS ranking puts him in the top 15% of stocks.
Apple stock has an IBD composite rating of 93 out of 99, according to the IBD Stock Checkup tool. IBD’s composite rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a composite rating of 90 or higher.
Technical analysis of AAPL stock
On Nov. 17, Apple stock broke from a cup-and-handle base to a buy point of 153.26, according to charts from IBD MarketSmith.
Over the past 15 weeks, AAPL stock has consolidated with a buy point of 183.04. This buy point is 10 cents above its all-time high, reached in early January, based on IBD trading guidelines.
However, in a negative sign, Apple stock is trading below its 50-day moving average. Additionally, it has an IBD accumulation/distribution rating of D, indicating institutional equity selling.
Is Apple stock a buy it now?
Apple stock is not a buy right now, but it could soon be. This is a consolidation pattern, but the stock market is currently unstable.
Keep an eye on the overall stock market. If the market is heading south, don’t try to fight the general direction of the stock market. Check IBD’s Big Picture column for current market direction.
To find the best stocks to buy and watch, check out IBD’s stock listings page. Other stock ideas can be found on IBD’s Leaderboard, MarketSmith and SwingTrader platforms.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MIGHT ALSO LIKE:
Is Microsoft Stock a buy it now? This is what the IBD graphs show
Is Roku Stock a buy as a company streaming old Quibi shows?
Find Compelling Growth Stocks with IBD’s Stock of the Day
Catch the next big winning stock with MarketSmith
Get action ideas from IBD experts each morning before opening