Apple (NASDAQ:AAPL) stock has been trading in the red after it predicted a $4 billion to $8 billion reduction in sales due to ongoing supply constraints.
Coronavirus-led restrictions in China are likely to take a toll on the company’s quarterly performance in June. Its fiscal second-quarter profits and revenues came ahead of analyst estimates, fueling strong demand for its digital services and the iPhone. Hence, the troubling outlook has cast a shadow on another rock-solid performance by the iPhone maker.
The Russia/Ukraine War caused major disruptions to supply chains across the globe. It’s been a double-whammy for tech companies, already reeling from chip shortages. Chief Executive Officer Tim Cook stated “We are not immune to these challenges, but we have great confidence in our teams, and our products and services — and in our strategy.”
Apple’s board is unfazed by these short-term headwinds, authorizing share repurchases worth $90 billion recently. The company’s businesses are performing remarkably well and continue to prove the naysayers wrong.
Apple produces the largest free cash flows of any company globally and is committed to rewarding its shareholders through dividends and buybacks. Considering its massive balance sheet and resiliency under the challenging conditions at this time, the stock is a relatively safe investment with healthy expectations for further gains in the future.
Furthermore, with new segments including VR and automotive, the company is likely to have multiple new growth opportunities. The challenging market conditions at this time have created an attractive entry point for investors to load up on AAPL stock.
On the date of publication, Muslim 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