Apple (NASDAQ:AAPL) stock has fallen from just under $200 per share, to around $186 per share since mid-December. While shares have only experienced a modest decline in price during this time, the question now is what lies ahead for this “Magnificent Seven” stock.

Some may believe that this pullback is temporary and now’s the prime time to “buy the dip.” Others may see it as a warning to exit positions or to avoid the stock. So, who’s right, who’s wrong, and most importantly, what’s the best move? Let’s take a closer look and find out.

AAPL Stock: What’s Driving the Pullback?

Uncertainty over macro improvements like lower inflation and interest rates may be causing some minor turbulence for the broad market, but that’s not the key factor behind the recent Apple stock pullback.

Instead, factors more directly related to AAPL stock are driving the latest slide for shares. In the last trading days of 2023, shares were rattled by news of a court-order import ban on Apple Watches, related to a patent dispute between the tech giant and medical technology company Masimo.

Shares, already trending lower before this news, fell on the news. Even though the import ban was temporarily lifted soon after, AAPL experienced little in the way of a rebound. Since the start of the calendar year, additional negative developments have weighed on AAPL. Specifically, those developments were the issuance of not one, not two, but three sell-side downgrades.

Analysts from Barclays, Piper Sandler, and Redburn have all weighed in, pointing to weak iPhone demand, slowing services growth, and a rich valuation as factors that could affect AAPL’s performance in 2024.

Yet while what’s driving the pullback should give those saying to “buy the dip” some pause, and gives credence to the more cautious, don’t assume “stay away” is the clear takeaway here.

Why the Long-Term Bull Case Hasn’t Gone Away

While it’s possible that the market quickly absorbs the negative news surrounding AAPL stock, it’s also possible that these concerns linger, leading to continued poor performance for shares in the short-term.

But while the near-term could remain stormy, the market’s response to these downgrades could still in time prove to be an overreaction. In the months ahead, sentiment for shares could swing back in a big way. At least, that’s the view of analysts at Morgan Stanley.

Amid the spate of analyst downgrades discussed above, Morgan Stanley has reiterated its “overweight” rating and $220 per share price target on AAPL. Per the analysts, progress with Apple’s “Edge AI” efforts could bode well for shares later this year.

That’s not to say that AAPL is going to benefit from a high level of “AI mania” in 2024, as seen with other major tech stocks. It may be something that gives shares support before consumer spending bounces back.

Then, if said demand rebound happens between now and December? Shares could really start to make an exit from their recent slump.

The Best Move With AAPL

Later this year, increased appreciation of Apple’s potential to capitalize on the generative AI trend, plus an improving consumer spending picture, could enable AAPL to climb back toward $200 per share. Prices north of $200 per share may also be within reach.

That’s not all. In the years ahead, AI-related innovations, plus other long-term catalysts (like iPhone sales growth in India and other non-China emerging markets) will drive the level of earnings growth needed to sustain (or even expand) this stock’s so-called “rich” forward earnings multiple (around 28).

With this, here’s the true takeaway. If you’ve been holding this stock for the long haul, there’s no need to change your stance. If you’ve yet to buy AAPL stock, feel free to consider it, whether at current prices, or in the event shares experience a further short-term decline in price.

AAPL stock earns a B rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.