Stocks to buy

Why AAPL Stock Is Low-Hanging Fruit on Any Weakness

Big tech stocks have been on a tear so far this year, and Apple (NASDAQ:AAPL) is no exception. In fact, AAPL stock has more-or-less bounced back from its 2022 tech sell-off losses. Shares in the iPhone today are just a few dollars below their all-time high.

However, while a satisfying turn of events for AAPL investors, concerns are rising that the FAANG component has gone up too far, too fast.

In their view, after a nearly 40% move higher since the start of 2023, a pullback, or worse, a correction is due. There are several factors that, while not affecting the stock much now, could cause a reversal to happen.

But while some temporary weakness may perhaps lie ahead for Apple, don’t assume that means you need to take profit if you currently own it. If you’ve yet to buy it, this dynamic may create a golden opportunity.

AAPL Stock and Growing Pessimism

Don’t get me wrong. It’s not as if Apple shares are anywhere close to falling out of favor with the market. According to Marketbeat, out of 33 analyst ratings, 26 rate shares a “buy,” with only 5 rating it a “hold,” and 2 rating it a “sell.”

That AAPL stock is back near pre-sell off price levels is a testament to its continued popularity among investors. Still, there are several things that could soon dampen bullishness, a revenue miss for the current quarter (ending June 30), for one. At least, that’s the view of Loop Capital’s Ananda Baruah.

On May 23, the analyst downgraded AAPL from “buy” to “hold.” They cited Apple’s reduction of its iPhone shipment forecast as a sign that revenue this quarter could fall short of expectations. It’s possible this makes the market less bullish on Apple’s Augmented Reality/Virtual reality catalyst.

There is increasing uncertainty over whether this soon-to-be-unveiled product will be a moderate hit, or a massive flop. To top things off, investors could start to adopt analyst firm Bernstein’s more doubtful view of Apple’s growth prospects in non-China emerging markets like India.

Temporary Issues Don’t Change the Story

Despite these many issues that could temporarily sink AAPL stock lower, don’t assume this means middling or weak returns for shares over a longer timeframe. While possible that Apple falls short of guidance this quarter, that doesn’t mean further misses lie ahead in subsequent quarters.

Keep in mind that Apple is only starting to bounce back from the recent tech sector slowdown. Mixed results in 2023 could give way to strong numbers in 2024 and 2025, especially as the company continues to expand the reach of its Services segment. Although Services growth slowed last quarter, it could surge back in a big way as the overall economy normalizes.

Better yet, after success in subscription-based verticals like apps and music, there’s enormous potential for Apple to “disrupt the disruptors” in fintech.

Previously, I’ve talked about Apple’s move into the “buy now, pay later” (or BNPL) space. Apple could also give incumbent fintechs a run for their money in areas like payments, merchant services, and savings accounts.

Add in its strong potential to continue releasing innovative products, even if its AR/VR device flops, and it’s clear that AAPL is far from running out of growth runway.

The Takeaway

On top of these many positives, don’t forget, either, that there’s a project still in the works that later this decade could truly move the needle for this already mammoth-sized company. That would be the Apple car, or the company’s much-anticipated electric vehicle (or EV) with self-driving capabilities.

While AAPL could pull back in the latter half of 2023, growth stands to re-accelerate in the coming years. As discussed above, Apple has many opportunities it can pursue to achieve this.

Once back fully into growth mode, Apple shares are poised to snap back to its high-water mark, then onto new highs.

If you own AAPL stock today, there’s no need to make a hasty exit. If you currently do not own it, feel free to buy at current prices, but consider pouncing on it following any weakness.

AAPL stock earns a B rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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