Wait for Post-Earnings Weakness to Buy Apple

AAPL stock - Wait for Post-Earnings Weakness to Buy Apple

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Apple (NASDAQ:AAPL) stock has not been spared from the wider tech selloff. Shares of the iPhone maker are down 14.5% in the year thus far. On the bright side, AAPL stock has not been impacted as much as some of the other growth stocks in the tech space.

After the market close, Apple is expected to report earnings on April 28. Usually, when a tech giant like Apple is set to report earnings, it is a safe bet to purchase shares before the event. However, now is not the time to invest in AAPL stock if you consider the latest news.

JPMorgan (NYSE:JPM) predicts that iPhone revenue will not be as high as hoped when Apple reports its earnings this week. Apple had a great 2021, with second-quarter growth exceeding expectations at 54%. Therefore, the company faces tough year-over-year comps.

Country-wide factory shutdowns in China will have a big impact on Apple. It’s important to highlight production problems because, unfortunately, this has been the reason for Apple’s recent financial losses. In addition, China was one of the key areas in which the company saw growth last quarter. It was able to increase revenue there and benefit from new demand.

Apple is one of the safest investments out there. It’s one of the largest companies globally and has a very long history of growth. However, shares are not trading at a huge discount versus other tech stocks.

Another factor that can contribute to the decline of AAPL stock this week is a recent report regarding a slowdown in demand for 5G in China. In addition, Apple may have taken some production cuts with suppliers in preparation for a downturn in iPhone sales.

There are many other factors that will impact Apple. The Russian invasion of Ukraine, rising inflation rates and interest rates could also be considerable problems if they’re not handled well. Supply chain strain can cause similar issues.

The stock market has been volatile lately. There are those who think the volatility will continue and those who think it will normalize soon. Investors in AAPL stock need to decide which outcomes are most likely to happen. Knowing this, I would wait and see what happens with earnings before buying more shares.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.


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