Cons of AAPL Stock
iPhone Overreliance: Part of the reason growth has slowed for Apple stock lately is because it is heavily reliant on its iconic iPhone to generate revenue. Right now, the device still accounts for about two-thirds of the top line, so it’s very difficult to imagine AAPL stock moving higher as this core part of its business decays or flatlines.
Stuck in a Rut: Shares have been bouncing around lately, but longer-term have remained range bound between $100 and $120 a share since late 2014. Sure, if you bought AAPL stock at $100 and unloaded at $120 that’s a nice 20% profit … but shares are now at the upper bounds of that range again and that could mean a rocky road lies ahead.
Tech Is Unforgiving: There’s always a lot of lip service paid to “innovative” companies with a history of “disruption,” but history shows it is quite rare for a once-dominant large-cap tech company to regain its former glory after it stumbles. Whether you’re talking about Cisco Systems Inc. (NASDAQ:CSCO), Microsoft Corporation (NASDAQ:MSFT) or recently acquired Yahoo Inc, it’s clear that once these big players take a breather, newer and hungrier companies tend to step in and fill the space. Be careful before you assume AAPL stock is any different.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.