Earlier this week, Apple Inc. (NASDAQ:AAPL) held its much-anticipated Worldwide Developers Conference (WWDC) event. While Apple stock already had the wind at its back, the event helped push shares to new all-time highs. That’s no small feat when we’re talking about a company with a $950 billion market cap.
So how much upside is left?
Admittedly, investors should have hopped on the Apple train a while ago. If not years ago, even just a few months ago would have generated a solid return for investors. In February we said to buy Apple when it was near $155. Now it’s at almost $195 and gunning for $200.
That leaves many late to the game if they’re looking to buy. But before we get into how to handle Apple stock now, let’s look at its WWDC event.
Apple’s WWDC Announcements
Apple’s WWDC event unveiled iOS 12. The new update should be available in September and will provide a big boost in performance. According to Apple, app loading speed should double, for instance. The new iOS will also boast new Animoji characters and group FaceTime, allowing up to 32 participants in a group video call. It will also include updates to Siri.
On that note, it’s surprising to me that Siri is still so far behind its peers. Digital assistants from Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) continue to leave Apple’s Siri in the dust. Given Apple’s financial and personnel resources, I’m surprised they haven’t caught up and surpassed the competition.
One area where Apple doesn’t plan to trail though? Augmented reality (AR), an area that CEO Tim Cook has been pretty excited about in the past. At Apple’s WWDC event, the tech giant introduced ARKit 2, an updated developers kit for AR applications. The company created a new file type to support these applications and they’re even compatible with the Creative Cloud platform on Adobe Systems Incorporated (NASDAQ:ADBE).
Apple’s new iOS will also allow users to set time allotments to specific apps — for example, only spending 10 minutes per day on Facebook Inc. (NASDAQ:FB) and 10 minutes on Instagram or Twitter Inc (NYSE:TWTR). We’ll see just what kind of implication this may have on FB, TWTR, Snap Inc (NYSE:SNAP) and others.
Additionally, Mac users will get a new OS too, this year’s being called Mojave. The Apple Watch will also get a software upgrade with WatchOS5. It adds a walkie-talkie feature and a ton of workout features for the health-is-wealth crowd.
Trading Apple Stock
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Apple stock had spent six months in the “megaphone” before breaking above it about a month ago. Last week we were eyeing a breakout over the $190 level and sure enough, Apple stock has delivered on that front.
Apple has a lot of catalysts going for it right now. It has a very solid growth profile and a reasonable valuation given that growth. Last month management gave a 16% bump to its dividend and added a $100 billion repurchase plan to its buyback strategy. Famed investor Warren Buffett continues to love the stock and loaded up on 75 million more shares in the first quarter of 2018.
The point is that Apple is a very strong company with very strong cash flow generation. It’s a great business to be an investor in. Currently with a $950 billion market cap, I continue to believe that Apple will be the first to eclipse the $1 trillion mark.
Take that for what it’s worth. It leaves about 5.2% upside from current levels for investors looking to get on board. However, I would suggest buying Apple on dips. Despite being a high-quality company, Apple stock is prone to wild price swings.
Apple stock has been hot and so has tech. While that trend could continue into July earnings, look for the group to at least pause and take a break. It could be the buying opportunity investors need if they missed their previous opportunities.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held a long position in AAPL.
