Apple (NASDAQ:AAPL) stock investors saw their shares slide in value as part of the broad tech stock selloff at the start of September. And since that time, Apple stock’s performance has been choppy. Some investors think that it’s unlikely to recover to its $134.18 close on Sept. 1. But amid reports of a big Apple stock sale and a high profile analyst price cut, is now a good time to even be thinking about an AAPL stock purchase?
Apple has had its challenges in 2020, as all tech companies have. But this a stock with a rock-solid “A” rating in Portfolio Grader. And despite its challenges over the past several months, AAPL stock is still up 62.7% so far this year.
That said, we’re coming into the company’s historically strong holiday quarter — with a compelling lineup of new products. And more on the way (more on that shortly). Thus, I look at the company’s current weakness as an opportunity rather than a warning sign.
One More Thing Event
On Nov. 10, Apple held its “One More Thing” event. But was that one more thing? Apple delivered on a promise it made earlier this year to break away from Intel (NASDAQ:INTC) chips for its Mac computers. After years of reliance, it promised to use its own Apple silicon and chip architecture from Arm Holdings. The resulting chips would give it greater leverage over its supply chain, better software and hardware integration, and ultimately, improve performance for its computers.
Overall, moving the Mac lineup to Apple A-series chips will let the company do the same thing with its computers. In addition, the move to A-series chips opens the door to compatibility between apps made for the iPhone and iPad, and the Mac.
Computer sales are no longer the backbone of Apple’s business, but last quarter Macs still brought in over $9 million in revenue.
A few weeks back, I wrote about AAPL stock being an attractive target. At the time, Apple was sliding again, just a week after the delayed iPhone 12 event.
Nothing has changed since that post, but the stock is up 2% since then. That said, the iPhone 12 — the first iPhone series to offer 5G support — has the potential to kick off a huge upgrade cycle for Apple. The pre-sales for the new iPhones were higher than expected. Even better for Apple revenue and margins, more buyers seemed to be favoring the more expensive iPhone 12 Pro model. Last weekend, pre-orders began for the last of the new 2020 iPhones, the iPhone 12 mini and the iPhone 12 Pro Max.
Those iPhone 12 sales will start to show up in Apple’s first quarter 2021 revenue, and you can expect to see a jump in AAPL stock when the numbers are revealed.
With Black Friday fast approaching, holiday shopping is kicking off in earnest. This is a quarter where Apple traditionally shines. The company has a strong selection of new products to offer this year. Besides the new iPhones, there’s a new iPad Air, Apple Watch models, the incredibly popular AirPods Pro wireless earbuds and a new $99 Home Pod Mini smart speaker.
Overall, last year’s holiday quarter resulted in record-setting Q1 revenue and earnings. And thus, I expect we’ll see a repeat for Q1 2021.
Bottom Line on AAPL Stock
Despite these doom and gloom headlines, I think Apple is far from being in decline. Many investment analysts are taking a wait and see approach on Apple stock at the moment, but the majority still have Apple stock rated as a buy. Among those tracked by CNN Money, the median 12 month price target of $133 (that’s 11.2% upside) reflects a confidence that AAPL stock is going to recover from its current dip — and continue back into growth territory.
So, if the prospect of buying Apple stock makes you worried you are investing in the past instead of the future, there are plenty of alternatives. In fact, I put together a list of “8 Tech Stocks of Tomorrow Investors Should Buy Today” that will help you out.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.