Consumer electronics giant Apple (AAPL) has seen its shares pummeled this year on concerns about weakening macroeconomic conditions. But with the pullback in Apple stock, many investors are wondering if AAPL stock is a buy right now.
Apple Stock Retreats From High
In intraday trading on Jan. 3, Apple briefly hit a market value of $3 trillion when its shares reached 182.86. Apple stock climbed as high as 182.88 that day before retreating. It was the first company to reach a market capitalization of $3 trillion.
On Jan. 4, Apple stock again reached the $3 trillion mark. It notched a record high of 182.94 before pulling back. AAPL stock trended lower in the weeks that followed but it has attempted to rebound several times since then. Apple stock ended the regular session on Aug. 26 at 163.62.
In August 2020, Apple became the first company to reach a market cap of $2 trillion.
Apple’s Storied History
Apple has been an American success story several times over. First, it ignited the personal computer revolution in the 1970s with the Apple II. Then it reinvented the PC in the 1980s with the Macintosh.
Co-founder Steve Jobs returned to run Apple in 1997 and oversaw 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 massive growth and created a loyal base of customers willing to buy Apple products and services.
But iPhone sales have slowed as users hold on to 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: iPhone 14 On Deck
On June 6, Apple showcased features of its upcoming operating systems for iPhone, iPad, Mac and Apple Watch at its Worldwide Developers Conference. It also unveiled a second-generation Mac processor, M2, which is available first in two new laptops, the MacBook Air and MacBook Pro.
Apple stock ended the day up 0.5% on the news. Some Wall Street analysts were underwhelmed by the surprise-free event. They expected at least hints about the company’s rumored mixed-reality headset.
Earlier this year, on March 8, Apple held a spring product launch event where it introduced 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. Those 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. Plus, Apple introduced a new version of its iPad Air tablet.
But investors were unimpressed. Apple stock fell 1.2% on the day of the event.
The next catalyst for Apple stock could be its fall product launch event, scheduled for Sept. 7. Analysts say Apple will introduce its iPhone 14 series smartphones and Apple Watch Series 8 smartwatches at the event.
Apple Opportunities For Growth
With the iPhone business maturing, investors are wondering what the next big growth driver will be for Apple stock.
Lately, two businesses have given Apple’s sales and profits a boost: 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 about slowing growth for Apple’s services business.
Meanwhile, Apple is facing antitrust scrutiny in the U.S., 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 dip 8% to 8.08 billion in the June quarter. Supply chain issues hurt the unit’s performance in the most recent quarter. This unit includes wearables like the Apple Watch, AirPods wireless earbuds 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 and augmented reality next January. 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: Solid Beat
Late on July 28, Apple beat Wall Street’s targets for its fiscal third quarter thanks to better-than-expected iPhone sales and services revenue. It forecast sales growth to accelerate in the September quarter as supply chain issues ease. Apple stock rose 3.3% on the news during the next regular trading session.
Apple earned $1.20 a share on sales of $83 billion in the quarter ended June 25. Analysts polled by FactSet expected Apple to earn $1.16 a share on sales of $82.8 billion. On a year-over-year basis, Apple earnings fell 8% while sales inched 2% higher.
In the June quarter, iPhone sales rose 3% to $40.67 billion. Smartphones accounted for 49% of the company’s total sales in the period.
Apple’s Mac computer sales declined 10% to $7.38 billion. And iPad tablet sales slipped 2% to $7.22 billion. Apple struggled with shortages of Mac computers and iPad tablets in the quarter.
The company’s next earnings report won’t be until late October.
Exclusive Apple Stock Ratings
After hitting its record high at the start of 2022, Apple stock pulled back as much as 29%.
AAPL stock has an IBD Relative Strength Rating of 89 out of 99. The Relative Strength Rating shows how a stock’s price performance stacks up against all other stocks over the last 52 weeks.
Apple stock has an IBD Composite Rating of 92 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 better.
AAPL Stock Technical Analysis
On Nov. 17, Apple stock broke out of a cup-with-handle base at a buy point of 153.26, IBD MarketSmith charts show. But after appreciating 19% it gave up all those gains in the bear market.
For the past 34 weeks, AAPL stock has been consolidating with buy point of 183.04, according to IBD MarketSmith charts.
However, with a recent pullback, Apple stock has formed a handle with a new buy point of 176.25.
In a positive sign, Apple stock is again trading above its 50-day moving average line, as well as its 200-day line. Plus, its relative strength line has been climbing as it outperforms the S&P 500.
Also, Apple stock has an IBD Accumulation/Distribution Rating of B, indicating institutional buying of shares.
Is Apple Stock A Buy Right Now?
Apple stock is not a buy right now, but it soon could be. However, with the current market uptrend 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 stock market direction. Check out IBD’s Big Picture column for the current market direction.
To find the best stocks to buy and watch, check out IBD’s Stock Lists page. More 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.
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