- First quarter PC sales shrunk globally after a two-year pandemic surge, but Apple (AAPL) bucked the trend with growth.
- Apple’s long-term plan to shift Macs and MacBooks to its own processors is paying off.
- This is another sign that investors should consider buying AAPL stock while it is still off its 2022 high.
One of the unanticipated effects of the Covid-19 pandemic was a reversal in the near decade-long slump in global PC sales. With many people working from home and schools increasingly switching to hybrid or remote learning, PC sales surged. Even in 2021, PC sales were still up 14.8% compared to the previous year. Apple (NASDAQ:AAPL) reported record Mac sales of $9.18 billion in the fourth quarter, showing Mac sales were still a big part of the AAPL stock value equation.
However, in the first quarter of 2022, PC market growth came to an abrupt halt. In fact, a new report from Gartner (NYSE:IT) shows that globally, PC sales shrank by 7.3% compared to Q1 2021. The top two PC manufacturers experienced a double-digit fall in sales. A notable exception to the contraction was Apple, which saw its Mac sales grow 8.6% year-over-year (YoY) for the quarter. That strength of Mac sales is yet another reason to consider an investment in AAPL stock. Especially with what is expected to be coming down the pipeline from Apple as soon as June.
Apple’s Investment in Processors Is Clearly Paying Off
In 2020, Apple began the process of transitioning all Macs to the company’s own, custom-designed silicon. In November of that year, I wrote about the potential of these chips (the first was the M1) to provide AAPL stock with a significant boost.
Despite the broad tech stock beatdown of 2022, Apple shares are still up 44% since that article was published. There are many factors involved in the growth — success of the iPhone 13, growing services revenue, and AirPods domination among them — but the resurgence of the Mac has been a part of it. That story has continued with the uber-powerful new M1 Ultra processor and Mac Studio unveiled at an March Apple event.
In its latest quarter, Apple reported $10.85 billion in Mac revenue. That’s up 25% YoY. It represents an 8.8% chunk of the company’s overall revenue for the quarter. It’s no iPhone, but with the Mac in the spotlight and sales continuing to increase even as demand for PCs wanes, don’t discount the Mac’s ability to strengthen AAPL stock.
WWDC Could See a Very Important New Mac Release
Why is now a good time to buy Apple Stock? To take advantage of a new MacBook Air.
Apple first released the MacBook Air in 2008. By 2010 it was the company’s best-selling laptop. The MacBook Air has remained the must-have Mac laptop since then. It was a no-brainer that Apple would choose the MacBook Air as one of the first models to receive the new M1 processor. In reviews of the M1 MacBook Air, the biggest knock most reviewers could muster was that it looked identical to the old model.
That is going to change. The rumor mill has been buzzing for months about a completely redesigned MacBook Air. The new model is expected to come with a new M2 processor, with additional ports, and a colorful design inspired by the 24-inch M1 iMac. According to one noted Apple analyst, we could see the new MacBook Air at Apple’s World Wide Developer Conference (WWDC). That takes place in June.
When the company does take the wraps of an all-new version of its hottest-selling laptop, the market will react. Remember, this is Apple’s mass market Mac. That means as soon as June 6, AAPL stock could be feeling the M2 MacBook Air effect.
Bottom Line: Should You Buy AAPL Stock Now?
Apple stock is a proven performer with a solid “B” rating in Portfolio Grader.
However, Investing in this company is not without risk. It has been under constant regulatory scrutiny over anticompetitive behavior in areas like its App Store fees. In the latest development on that front, Apple is now under investigation by the EU in the streaming music area. Any economic contraction could also cut into consumer spending, and Apple revenue. The company is making moves to reduce its reliance on China, but that Chinese link remains an issue for supply chain disruption and the potential for economic sanctions.
Still, AAPL stock has what it takes to deliver on long-term growth. There’s the distinct possibility of an all-new version of the top-selling Mac arriving at June’s WWDC. Should that happen, it would have a high probability of being an instant AAPL stock catalyst. If you’ve been considering adding Apple shares to your portfolio, with AAPL down 7% in 2022, now would be the time to make a move.
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.