If you’re investing under the assumption that Apple (NASDAQ:AAPL) is infallible and invincible, think again. As the company shows cracks in the armor, AAPL stock gets a “D” grade and we’re not giving it a confident recommendation today.
We’ve already pointed out some problems with the seemingly almighty Apple. For example, iPhone shipments fell by approximately 33% year over year in February. In the first six weeks of 2024, iPhone sales declined 24% YOY. Stick around, as there’s more evidence that, so far, Apple is having a less-than-stellar year.
Apple Resorts to Layoffs
As of April 5, AAPL stock was down 8.65% year to date. That’s definitely not a magnificent performance for a Magnificent Seven stock.
It’s a sign that everything isn’t necessarily going well with Apple. And here’s another sign: Apple is now resorting to layoffs.
Remember, Apple CEO Tim Cook previously declared that mass layoffs would be a “last resort.” Yet, here we are and Apple is laying off 614 employees in California.
Apparently, this unfortunate news came after Apple gave up on Project Titan, the company’s attempt to build an electric vehicle. Nearly 2,000 employees were working on that project, so don’t be surprised if more workers are let go at some point.
Apple’s Personal-Robotics Endeavor Could Be a Major Failure
It might feel strange to witness Apple failing at something. Yet, we have to be forthright and acknowledge that Project Titan was a titanic failure that will cost some people their jobs.
You’d think Apple’s management would learn their lesson from this unfortunate experience. You might also think that Apple would stick to its core businesses, such as selling smartphones, for a while.
Yet, very soon after Project Titan’s failure, Apple is jumping headfirst into personal robotics, of all things. Reportedly, Apple is developing robots to follow people around in their homes, in hopes that this will be the “next big thing.”
Wedbush analyst Dan Ives is highly skeptical of Apple’s new personal-robotics endeavor. He contends that Apple should focus on artificial intelligence as CEO Tim Cook’s “legacy is going to be AI.”
Ives argues that Apple’s foray into household robots would be a “black-eye moment” and a “horror show” for the company.
AAPL Stock Could Stay Under Pressure for a While
As Apple scraps Project Titan and starts laying off workers, it’s clear that the company isn’t invincible. Plus, it’s risky for Apple to jump into the personal-robotics field. As Ives suggests, Apple really ought to devote its capital and effort to AI rather than to household robots.
Overall, it looks like Apple is going through a rough patch. Until there are clear indications that the rough patch is finished, it’s hard to be confident about AAPL stock. So, we’re assigning a “D” grade to the stock and investors can choose to stay on the sidelines for now.
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.
