Apple shares have been gaining despite 2016 sales of $215 billion being almost 10% less than its record 2015 haul of $233 billion, despite its profit margin and operating margin falling slowly for years, and despite its debt level now representing 25% of assets. Android, the mobile operating system from Alphabet Inc (NASDAQ:GOOGL), now represents 88% of the global market.
The bullish case is that Apple continues to gain share in the U.S. and that Android’s lead means there is ample room for it to grow. The bulls will also point out that Apple knows how to make big money from its phones, with its revenue from Services along now running at a $30 billion annual rate, making it a major cloud player by default.
The Bottom Line on AAPL Stock
I recently took the opportunity to sell some of my Apple shares, at about its current price.
It remains one of the most profitable investments I have ever made, but I have become bearish on the economy, and Apple can’t get out of the way of a recession, even a small one.
Diversification alone should make you wary of AAPL stock. Even with my latest sale, Apple is the second-largest holding in my stock portfolio. It’s is a mature company, and mature companies won’t grow the way maturing ones will.
Remember that when you next visit the Steve Jobs Theater. If Steve were alive, he would still be younger than me.
Dana Blankenhorn is a financial and technology journalist. He is the author of the sci-fi novella Into the Cloud, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing, he was long AAPL and GOOGL.