The Apple (NASDAQ:AAPL) stock buyers were fully in control during 2023’s first half. Can they follow through after a huge share-price rally, though? The answer is yes, especially with Apple expecting to maintain a robust production pace for its world-famous smartphone model.
Apple will always have its critics, but I’m not worried about the company at all. Sure, there are challenges to be faced, especially in China’s tech market.
Nevertheless, I’m standing by my Apple share price target of $400 by 2025. Moreover, today I’m unabashedly recommending holding your AAPL stock and collecting dividends (even if the yield is low) for the long term.
Apple’s Defiant Confidence in a Challenged Market
Most likely, people generally don’t invest in Apple for the dividend payments. They’re looking for growth; they want to see Apple’s already impressive $3 trillion market capitalization expand even further.
Growth isn’t linear, however, as there will be hiccups along the way. Even a tech titan like Apple must face challenges, such as the tech-gadget market slump in China.
It’s no secret that a large portion of Apple’s production process (90% to 95%, reportedly) takes place in China. Yet, you might be surprised to discover that a sizable swath of Apple’s smartphone sales also occur in China; according to Barron’s, “Apple’s iPhone 13 was China’s best-selling smartphone last year.”
Hence, some of Apple’s investors may be concerned about “China risk” as the country struggles with less-than-ideal economic conditions. To quote Piper Sandler analyst Harsh Kumar, “In our conversations, most investors feel that a soft China could pose a risk to the numbers and further commentary.”
Apple’s management doesn’t seem to be overly concerned, however. Bloomberg reports that Apple is “asking suppliers to produce” roughly 85 million iPhone 15 units in 2023. That number is “roughly in line with the year before,” so clearly Apple’s insiders aren’t losing too much sleep over various obstacles in China and elsewhere.
Could a PC Recovery Boost AAPL Stock?
While smartphone sales are Apple’s bread and butter, let’s not ignore the company’s other tech gadgets. For example, Apple could generate significant revenue from its upcoming $3,499 mixed-reality (MR) headset.
Additionally, Apple might benefit from a potential recovery in a tech-market segment that slumped last year. I’m referring to the personal computer (PC) market — and one analyst envisions a surprising comeback in this niche segment.
Wells Fargo analyst Aaron Rakers actually sees brighter days ahead for PC manufacturers. “We continue to believe that the PC industry has completed its inventory correction — leaving us to focus on a stabilizing demand environment” heading into 2023’s second half and the first half of next year, Rakers posited.
Furthermore, there are implications for AAPL stock investors. “We expect Apple to continue to gain share as the PC market recovers,” Rakers predicted. Just imagine, if you can, Apple and its shareholders benefiting from a PC industry revival. It’s amazing to think about, but it might actually happen this or next year.
AAPL Stock: $400 Is Still Realistic for 2025
Could the Apple share price double by 2025? It’s entirely possible as Apple clearly remains confident in its smartphone sales.
Along with that, Apple could potentially generate strong revenue from MR headsets and PCs. So, despite ongoing challenges in China and elsewhere, there’s no reason to bet against Apple.
Ultimately, AAPL stock investors should stay in the trade and aim for $400 at least. Beyond that, we can always revisit and reassess Apple’s future prospects.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
