- Apple (AAPL) made headlines as it slipped from its spot as the most valuable company, but it won’t last.
- Current and oncoming issues will blow over.
- A prolonged buying opportunity is at hand.
There are multiple headwinds facing Apple (NASDAQ:AAPL) stock currently. The truth is that the company is likely to face sustained issues in the coming weeks. However, it simply makes little sense to bet against it even as it slips from its spot as the world’s most valuable company.
The news that Saudi Aramco overtook Apple as the world’s most valuable company by market capitalization garnered a lot of headlines recently. But understand it for what it is: The ebb and flow of market cyclicality.
An article in Barron’s argued that the flip-flop was a serious sign for Apple investors. The argument was predicated upon the idea that Apple has rebounded from $150 price levels many times of late. However, now that it is dropping below those levels, the idea is that it is facing some sort of crisis.
I’d avoid that logic. This is more about rising oil prices and a European Union oil embargo than anything else. Saudi Aramco is, of course, going to be a primary beneficiary of this news. So, it’s no surprise that it has momentarily usurped Apple’s position as the world’s most valuable stock.
But investors have to ask themselves a question: Which is more likely to hold for the long-term, very high oil prices or Apple as a premier technology company? I’d argue that the latter is much more likely. Yes, the war in Ukraine trudges on. However, Apple’s current woes are more of a consequence of temporary tech woes than anything else.
In other words, Apple will certainly rebound from its current position.
Other Bad Signs?
The news that Apple lost its spot as the world’s most valuable company follows on the heels of news that its June quarter could be a disappointing one.
At the end of April, Apple announced that supply chain constraints in China would cut into the company’s revenues in the upcoming quarter. The company also let it be known that those constraints were more severe than those it faced in the prior quarter, one in which the company recorded record revenues of $97.3 billion.
Even the most optimistic investors have to be a bit fearful in the near term. Investors who remain steadfast in their bullishness on Apple stock have to at least admit that there is potential for AAPL stock to remain undervalued for the foreseeable future.
Finding Hope for AAPL Stock
Okay, finding hope is probably a bit of an exaggeration. After all, Apple is an extremely resilient and powerful company. The idea that it will remain beaten down for an extended period of time is extremely unlikely.
Rather, I would assume that Apple is entering a prolonged period in which it will be discounted.
Analyst consensus target prices indicate that there is still significant upside in AAPL stock.
What to Do With AAPL Stock
It is fairly obvious that Apple is going to be an opportunity in the near term. Investors who catch themselves feeling that perhaps the company’s best days are behind it should disregard that feeling.
This is simply a case of cyclicality and once-in-a-lifetime external circumstances pushing a great company down. But Apple will rise again. It may take a few months, but it’s just about as good a bet as there is in the stock market. So, disregard the negative headlines that are highly likely to follow in the coming weeks and consider purchasing some shares now.
On the date of publication, Alex Sirois 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.