Consumer electronics giant Apple (AAPL) has posted three straight quarters of declining sales, a factor that has weighed on Apple stock. The company is hoping the upcoming release of its iPhone 15 handsets will set it on a growth path. Meanwhile, many investors might be wondering if AAPL stock is a buy right now.
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Cupertino, Calif.-based Apple announced its iPhone 15 lineup at a media event on Sept. 12. It also showed off its Apple Watch Series 9 smartwatches. But the event was largely surprise-free since most of the news had leaked out ahead of time.
Apple stock fell 1.7% the day of the product introduction.
Apple unveiled four versions of the iPhone 15: two basic models and two high-end “Pro” models. The premium models got the best new features, including a new processor and a redesign with a titanium frame and customizable “action button.” The top-of-the-line iPhone 15 Pro Max scored a 5-times optical zoom camera that uses a tetraprism lens. The new smartphones go on sale Sept. 22.
Preorders for the iPhone 15 Pro models have been strong so far, analysts said.
Apple Opportunities For Growth
With the iPhone business maturing, investors are wondering what the next big growth driver will be for Apple stock.
Recently, two businesses have given Apple’s sales and profits a boost: services and wearables.
In the June quarter, Apple’s services revenue increased 8.2% year over year to $21.21 billion. Meanwhile, its hardware sales declined 4.4% to $60.58 billion. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade and other offerings.
In March, Barclays analyst Tim Long said Apple’s advertising business is “underappreciated” by investors.
Meanwhile, Apple is facing antitrust scrutiny in the U.S., Europe and Asia for its App Store policies, including its 30% commission fee.
Apple Vision Pro On Horizon
On June 5, Apple unveiled its long-awaited Apple Vision Pro mixed-reality headset. The computer goggles combine virtual and augmented reality and will be available in early 2024. The headset will sell for $3,499.
Vision Pro is Apple’s first new hardware platform in more than eight years. The headset can play virtual-reality content and simulate augmented reality using video pass-through to show the real world. It is designed for entertainment, communications and productivity applications.
Apple stock fell 0.8% after the Vision Pro announcement. Critics on social media derided the new product as “nerd goggles.”
The killer app for the Vision Pro headset could be watching “spatial video,” analysts say.
Vision Pro is part of Apple’s push into the wearables market, following the success of the Apple Watch and AirPods.
Apple’s Wearables, Home and Accessories unit saw sales rise 2% to $8.28 billion in the June quarter. This unit includes wearables like the Apple Watch, AirPods wireless earbuds and Beats headphones. It also contains the Apple HomePod wireless speaker and other miscellaneous gadgets.
Meanwhile, speculation continues that Apple is looking to make a self-driving electric car.
Apple Earnings Report Mixed
Late on Aug. 3, Apple beat Wall Street’s target for earnings in its fiscal third quarter while matching views for sales. But its outlook for the current quarter was weak, sending Apple stock plunging 4.8% in the next trading session.
Apple earned $1.26 a share on sales of $81.8 billion for the quarter ended July 1. Analysts polled by FactSet had expected Apple earnings of $1.20 a share on sales of $81.8 billion. On a year-over-year basis, Apple earnings increased 5% while sales dropped 1%.
Apple’s results marked its third quarter in a row of declining sales. However, earnings returned to growth after two consecutive quarters of flat or declining profits.
For the September quarter, Apple predicts sales will decline 1.4% year over year.
In the June quarter, Apple’s iPhone revenue declined 2% to $39.67 billion and accounted for 48% of the company’s total sales.
Meanwhile, Apple’s Mac computer sales fell 7% to $6.84 billion. And its iPad tablet sales slid nearly 20% to $5.79 billion.
The company’s next earnings report is likely to come in late October. That could be another catalyst for Apple stock.
Apple Stock Hits $3 Trillion Value
In January 2022, Apple briefly hit a market value of $3 trillion, becoming the first company to reach that milestone. But it struggled to stay above that level and didn’t return to it until mid-2023.
Apple stock closed above a $3 trillion market cap for the first time on June 30. However, it is currently back below that level following a recent pullback.
Apple shares fell in early September after China banned central government officials from using iPhones and other foreign-branded phones. China cited national security concerns for the move, but it comes amid heightened trade tensions between the U.S. and China.
Apple’s Storied History
Apple has been an American success story several times over. First, it ignited the personal computer revolution in the 1970s with the Apple II. Then it reinvented the PC in the 1980s with the Macintosh.
Co-founder Steve Jobs returned to run Apple in 1997 and oversaw a winning streak of innovations that included the iMac, iPod, iTunes, iPhone, iPad and the App Store.
The biggest driver of Apple’s modern success is the iPhone. The game-changing smartphone, which debuted in 2007, sparked years of massive growth and created a loyal base of customers willing to buy Apple products and services.
Apple has an installed base of more than 2 billion devices in use today, including well over 1 billion iPhones.
Exclusive Apple Stock Ratings
AAPL stock has an IBD Relative Strength Rating of 81 out of 99. The Relative Strength Rating shows how a stock’s price performance stacks up against all other stocks over the last 52 weeks.
Apple stock has an IBD Composite Rating of 76 out of 99, according to IBD Stock Checkup. IBD’s Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Also, Apple ranked No. 5 on IBD’s 2022 100 Best ESG Companies list. ESG is short for environmental, social and governance.
AAPL Stock Technical Analysis
Year to date, Apple stock has climbed 37%. AAPL stock ended the regular session Sept. 18 at 177.97.
In a negative sign, Apple stock has been trading below its 50-day moving average line. Also, its relative strength line has been drooping lately as it underperforms the S&P 500.
Apple stock has an IBD Accumulation/Distribution Rating of E, indicating heavy selling by institutional investors.
Is Apple Stock A Buy Right Now?
Apple stock is not a buy right now. It needs to form a proper base in the right market conditions. Check out IBD’s Big Picture column for the current market direction.
Keep an eye on the overall stock market. If the market turns south, don’t try to fight the general stock market direction.
To find the best stocks to buy and watch, check out IBD’s Stock Lists page. More stock ideas can be found on IBD’s Leaderboard, MarketSmith and SwingTrader platforms.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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