- Apple’s (AAPL) share price continues to decline, presenting a great “buy the dip” opportunity for investors.
- The company recently lost its crown as the world’s most valuable publicly traded company.
- As the price continues to slump to $140 a share or lower, investors should plan to buy AAPL stock aggressively.
The price of Apple (NASDAQ:AAPL) stock just keeps getting better.
While the current market selloff has created a lot of carnage, it is also making some of the very best stocks available at discount prices, chief among them consumer electronics giant Apple. On May 10, AAPL stock looked attractive at $156 a share.
By May 16, the share price was down to $144, making it even more of a steal. At various points in recent weeks, the share price has fallen as low as $139 amid market turmoil, making the stock a screaming buy for long-term investors who want to start or improve their position in one of the best technology companies any investor can own.
| AAPL | Apple | $137.35 |
Losing Its Crown
Apple got a bit of a comeuppance recently when it officially lost its crown as the world’s most valuable publicly traded company. Oil giant Saudi Aramco (SAR) has surpassed Apple to become the world’s most valuable company.
On May 11, state-owned oil giant Saudi Aramco’s (TADAWUL:2222) market valuation reached $2.43 trillion, surpassing Apple, whose market capitalization stood at $2.37 trillion. While sliding into second place was largely symbolic for Apple, the move highlights the continued decline in technology stocks as interest rates rise and the potential for an economic recession grows. Year to date, AAPL stock is down 20%.
Meanwhile, Saudi Aramco’s stock has typified the run-up in energy companies that are benefitting from elevated prices that have oil currently trading at $110 per barrel. Saudi Aramco’s stock has gained 32% so far in 2022. Apple clinched the title of world’s most valuable publicly traded company in 2020 and held the crown for the past two years.
At one point, Apple’s market capitalization was above $3 trillion (the first company to cross that threshold) before declining in recent months. Still, rather than fret about the decline, investors should take advantage of the fact that AAPL stock has come down 20% and buy the dip.
Among 38 professional analysts who cover Apple, the median price target on the stock is currently $191, suggesting 38% upside from current levels. Beyond one-year, the benefits of owning Apple stock at these prices should multiple for investors.
Short-Term Issues
To be sure, the retrenchment in AAPL stock is not entirely due to the broader market downturn. The company is dealing with a number of issues that could impact its business. These include ongoing Covid-19 outbreaks and renewed lockdowns in Asia, particularly China where many of Apple’s parts suppliers are situated.
Additionally, at the start of May, it was announced that antitrust regulators in Europe have charged Apple with restricting rivals’ access to its NFC chip technology in a move that could force the company to open its mobile payment system to greater competition.
The European Commission said in a “statement of objections” that Apple has repeatedly abused its dominant position in markets for mobile wallets on iOS devices. Apple responded by simply saying that it will continue to engage with the European Commission on this and other issues. While it is by no means positive news, an antitrust action in Europe against a U.S. tech company is par for the course these days.
Perhaps the biggest recent news related to Apple is that the company has officially discontinued its iconic iPod digital music player. Introduced by company co-founder Steve Jobs in 2001, the iPod was credited with helping to turn Apple around from a nearly bankrupt company and paved the way for other devices such as the iPhone, iPad and AirPods, as well as podcasts.
While it’s sad to see the end of the iPod, the device made up a very small percentage of Apple’s revenue, which is today dominated by global sales of its ubiquitous iPhone.
Keep Buying AAPL Stock
As Apple stock keeps falling, investors should continue buying. If the share price declines and holds under $140, investors should get aggressive with their buying, keeping in mind that the stock’s 52-week low is $122.86.
While the market downturn this year has been difficult, it has also created opportunities that investors should recognize and capitalize on. And Apple is one of the best available opportunities, and getting better as its share price comes down further. When it’s this cheap, AAPL stock is a definite buy.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
