Should you own every single member of the so-called Magnificent Seven in 2024? Not necessarily. Indeed, it may be time to cross Apple (NASDAQ:AAPL) off of the Mag-7 list. After we delve into some of Apple’s issues, you’ll have a better understanding of why we’re assigning a “D” grade to Apple stock.
We’d be hard-pressed to give the stock an outright “F,” since Apple remains a highly regarded brand in the smartphone market. However, Apple isn’t the king of the hill in every region of the world. Gather all the information before investing.
Apple’s China Problem Persists
There once was a time when most analysts wouldn’t dare to downgrade Apple. The times are changing, though. For instance, per TheFly, Erste Group analysts recently downgraded Apple stock from “buy” to “hold.”
Reportedly, the Erste Group analysts stated that Apple’s “growth momentum continues to slow and the company’s new products do not currently have the potential to significantly improve sales momentum.”
Speaking of Apple’s sales-momentum problem, the company is clearly having issues in China’s smartphone market. During this year’s first quarter, Apple fell to third place in that market, behind China-based smartphone manufacturers Vivo and Honor.
And just recently, Barron’s reported that Apple is now in fourth place in China’s smartphone market. Apple only has a “15.6% market share, in part reflecting a 6.6% drop in shipments from a year earlier.”
Apple just can’t seem to gain traction in the Chinese smartphone market. The company evidently tried the tactic of adjusting its product prices, but to no avail.
“Apple’s price promotions in the [first] quarter were unable to mitigate the impact of the intense competition from Android players,” according to International Data Corp.
A Concerning Report About Apple
In case Apple’s investors didn’t already have enough to worry about, here’s another potential problem. A recent report from influential technology-focused publication TechCrunch alleged that Apple’s App Store “isn’t always as trustworthy as the company claims.”
Here’s what the TechCrunch report claims. Apparently, there were (and still might be) “obviously fake” Apple App Store apps pretending to be from auto-parts dealer RockAuto and password-management specialist LastPass.
The gist of the report is that Apple has been slow and/or reluctant to remove these highly suspicious apps despite complaints made to Apple. We can’t confirm or deny the accuracy of what’s been stated in TechCrunch‘s report.
However, the report is already circulating and the reputational damage is already being done, no doubt. This is an ongoing story that any prospective Apple stock investors should keep an eye on. Trust is everything in the business world, and if the users can’t fully trust the Apple App Store, that’s bad news for Apple.
Apple Stock: It’s Fine to Watch and Wait
Maybe, you were in a big hurry to load up on Apple shares before you read this. However, we encourage you to conduct your full due diligence on Apple. As you can see now, the company isn’t perfect and has issues to consider.
This doesn’t mean you have to cross Apple off of your watch list permanently. Just take your time and do your research.
Moreover, don’t assume that every Mag-7 company is problem-free in 2024. So, for the time being, Apple stock gets a “D” grade and investors shouldn’t jump into any hasty trades now.
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.
