The recent market meltdown has been tough on tech stocks, and Apple (NASDAQ:AAPL) is not the only one that suffered. Apple hasn’t had as steep a ride as some stocks, but some things remain out of its control. AAPL stock is down 24% year to date.
It isn’t the company’s performance that has led to the dip. Despite reporting record quarterly revenue, AAPL stock was down. Its services revenue stands at an all-time high, and hardware sales have recorded massive numbers.
Apple will continue this trend, and I would like to look at this dip as a chance to add to your position. AAPL stock is down 8% over the past month and is trading at $135 today. Add the stock to your portfolio for long-term gains.
| AAPL | Apple | $135.43 |
Finance Industry, Here Comes Apple
At the annual Worldwide Developers Conference, tech giant Apple announced that it will launch a BNPL service. Apple recently announced that it will handle the lending for its buy now, pay later service and it will not depend on any financial service companies.
Apple Financing LLC will be providing the services and it will remain separate from Apple’s core business. This move will enable users to make a purchase through Apple Pay and pay the amount in equal installments.
It’s a strong push towards finances in the future. This could only be the beginning for Apple. With its offering to finance, you do not need to head to any third party to make your purchase. The feature will launch in the US first and will be expanded to other countries later. This is also a strong move to increase sales and attract new customers.
More than anything, this is the first step of Apple entering the finance space and there could be more in the future.
A Solution to the Chip Shortage
We have seen several tech companies suffer due to the global chip shortage, and it looks like Apple wants to be better prepared for another shortage in the future. The company is looking to build more of its own chips in-house. This will give better control over the supply and allow efficient hardware integration.
Building its own chips will allow Apple to continue to work without any interruption and meet the manufacturing targets. According to Bloomberg, the company is working on a new office to replace components that it sources from Skyworks and Broadcom. It is making every move to expand the use of in-house chips, and this will work as a shield in case of supply chain issues in the future.
The Bottom Line on AAPL Stock
AAPL stock might not be recession-proof, but it is a safe stock compared to many others. The company suffered due to China’s lockdowns, but the country seems to be easing them now. Despite several issues, Apple has managed to report stellar results and has launched new products. It is already on the path of making Apple purchases easier and managing the chips in-house. Apple could have more events in the second half, of the year and the numbers could be even better.
Katy Huberty, a Morgan Stanley analyst has an “overweight” rating for the stock with a target price of $195. The analyst cited that the WWDC keynote was as large as expected and it shows that Apple’s innovation is working at full throttle.
The recent pullback makes it a great opportunity to own AAPL stock for the long term.
On the date of publication, Vandita Jadeja 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.
