Reducing his position, well-known investor Warren Buffet recently acknowledged Apple’s (NASDAQ:AAPL) track record of growth. Even though difficulties persist in the Chinese market, Apple’s strong brand opens doors to more possibilities. China continues to be vital to Apple’s earnings, but it’s a global game in the world of consumer discretionary products, with Apple seemingly winning this contest.
A towering giant in the world of technology stocks, Apple continues to remain the key innovative force pushing this sector in certain directions. The company’s recent product launches, its focus on cash flow growth, and its stability during up and down markets make this a stock worth holding. Let’s dive more into three reasons investors may want to consider holding their AAPL stock right now.
Wall Street is Optimistic
Apple has certainly raised the bar on itself, given its impressive growth coming out of the pandemic. This has led to difficult comps, and some negative revenue growth numbers in recent quarters, concerning some investors.
However, Wall Street analysts have a seemingly different view of the mega-cap tech giant. The consensus view of Apple stock is a ‘moderate buy,’ with the average target price projecting upside of more than 13% from current levels. Right now, 16 analysts believe AAPL stock is a buy, with 8 saying it’s a hold. But there aren’t any analysts bold enough to give a sell rating, for good reason.
Apple has remained one of the most stable and consistent mega-cap tech stocks in recent years. The company’s loyal consumer base and the strength of its brand buoys the company in difficult times. It’s hard to think why anything would change this time around, if a recession is around the corner. Thus, it’s buy and hold ratings galore for Apple, at least for now.
Vision Pro and Siri 2.0 Could Be Big Drivers
Apple shares dipped 5% this year, but Analyst Dan Ives sees a buying opportunity here. Ives set a $250 price target on Apple, a big price tag that’s largely attributed to expected growth of the Vision Pro headset. This is Apple’s newest innovation, digital and physical, giving the best of both worlds.
Despite the company’s high forward price-to-earnings ratio and $3,499 price tag, Apple’s steady financial position and successful products hitting the shelves suggest eventual customer adoption, Even though there’s a high forward price-to-earnings ratio.
Apple CEO Tim Cook announced plans to pull back the veil on AI advancements later in the year, with a detailed reveal expected at WWDC in June. AI could improve user experience but increasing headset prices may not be far off from the horizon if integrated into iPhones.
Global Influence is Strong
Apple’s 2.2 billion active devices, showcases the giant shadow Apple casts on the tech industry. The company’s software and subscription revenues go beyond hardware sales, demonstrating the company’s widespread success and ecosystem strength, cultivating customer loyalty.
Apple’s thriving services sector and strong brand have made investors find its stock worthy of favor. Despite trailing Android in market share, Apple rules half of smartphone sales and a large share of operating profit. In fiscal 2023, Apple churned $383 billion in total sales.
Buy AAPL Stock in a Heartbeat
Apple remains poised to produce impressive revenue this year. Currently, 43 experts project 2024 revenue will come in at $388.3 billion, in line with the previous year. Earnings per share are expected to come in at $6.55, also in line with the previous year’s numbers. Thus, Apple’s valuation remains contingent on investors willing to buy at the same forward multiple, something certain investors may not be willing to do.
That said, I do think Apple is deserving of its premium multiple. And while near-term downside is possible, over the very long-term, Apple has proven to be a solid buy and hold core portfolio holding. That’s not going to change anytime soon, in my view.
On the date of publication, Chris MacDonald 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.
