Don’t Sell Your Apple Stock!
This past summer, I decided to invest in my first stock. After weeks of research, I chose to invest in Apple Inc. (NASDAQ: AAPL). I bought three shares with an average price of $192.90 per share. At the time, I thought I was buying the dip, as in early July AAPL had reached a historic high of $196.19 per share. Little did I know that the stock would continue to plummet, even through the release of the new iPhone 15.
As of writing (November 20th), the stock is priced at $191.45 per share, which is 1% below the share price from July. The current price-to-earnings ratio sits at around 31, its lowest since May and well below the same benchmark for competitors Amazon and Microsoft. Nevertheless, there is hope for a bright future. With Apple’s strong background and their expansion beyond their regular products, now is not the time to sell, but rather, a time to buy the dip.
Everyone can agree that the iPhone 15 release was a flop. On the day the product was introduced in September, the stock fell 1.7%, further articulating the lack of excitement customers had for this new product. Patrick Seitz, author at “Investor’s Business Daily,” explained that one of the main factors as to why the product was not met with excitement was due to the leaks of news about the new phone ahead of its introduction date. Yet, according to analysts, pre-orders were strong; however, there was not the same demand for the new iPhones as Apple had predicted.
Although interest for the iPhone product may be diminishing, this does not indicate that Apple is heading in the wrong direction. Perhaps customers are waiting for a revolutionary iPhone, one that completely changes the way we use our cellular devices. The iPhone 15 had some new features, but clearly not enough to attract sufficient interest to keep the stock elevated.
Apple continues to release products, the hope being that one will grow in popularity in the coming months or years. Apple recently announced its launching of fresh Macbook products which they claim will be “faster and more efficient” because of the new M3 chips which they created. If this product doesn’t excite customers, the Vision Pro mixed reality headset should. These virtual reality goggles will be available in 2024 and be sold for $3,499.
This is another push that Apple is making into the wearable tech market, which have been pretty successful historically, with products such as the Apple Watch and Airpods. As of 2022, both products have generated over $41 billion in revenue.
Although there has been a decline in product sales, Apple has such a strong background that its financials remain solid. They regularly post more than $100 billion in annual free cash flow. In the third quarter alone, Apple reported $166 billion in cash and marketable securities. This demonstrates that Apple has the ability and resources to overcome poor economic conditions and thus should be able to rise from the decline it currently finds itself in.
Although many investors may be hesitant to buy, the future remains bright for Apple. They are constantly finding new ways to innovate, they are generating consistent revenue, and their strong background suggests that this dip is only temporary. If you are an Apple stockholder, stay calm. The returns may not come as quickly as you expected, but you have to understand that with large companies such as Apple, there will always be highs and lows. We are currently experiencing one of these lows, but with the exciting new products that Apple will release, we should expect a rise in the stock soon enough, especially as the market inevitably recovers. Stay patient as you have much to gain.
Photo Caption: A picture of Apple stock displayed on the “Stocks” app on an iPhone
Photo Credit: Dimitri Karastelev / Unsplash