Consumer electronics giant apple (Camel) recorded three consecutive quarters of declining sales, a factor affecting Apple shares. The company hopes that the upcoming release of iPhone 15 phones will put it on the growth path. Meanwhile, many investors may be wondering if AAPL stock is a buy right now.
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Cupertino, California-based Apple plans to introduce its iPhone 15 lineup at a media event on September 12. This event could be the next catalyst for AAPL stock.
The news leaks indicate that Apple announced four new phones: two basic versions and two advanced “Pro” models. iPhone 15 Pro models will include more technology upgrades and could see price increases over the current iPhone 14 Pro models.
New features in the iPhone 15 Pro versions are said to include the A17 processor, which is the first chip made at 3nm, which makes the phone faster and more energy efficient.
The Pro models will also see design improvements such as a titanium frame, improved battery life, and more memory. Analysts say the best-in-class Pro Max model will include an upgraded camera with a periscope lens to provide greater optical zoom capability.
At the September 12 event, Apple will also likely debut its Apple Watch Series 9 smartwatches.
Apple’s growth opportunities
As the iPhone business matures, investors are wondering what the next big growth engine will be for Apple stock.
Recently, two companies have boosted Apple’s sales and profits: services and wearables.
In the June quarter, Apple’s services revenue increased 8.2% year-on-year to $21.21 billion. Meanwhile, hardware sales fell 4.4% to $60.58 billion. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music, Apple TV+, Apple Arcade, and more.
In March, Tim Long, an analyst at Barclays Bank, said Apple’s advertising business was “underappreciated” by investors.
Meanwhile, Apple faces antitrust scrutiny in the US, Europe and Asia over its App Store policies, including its 30% commission fee.
Apple Vision Pro is on the horizon
On June 5th, Apple unveiled the long-awaited Apple Vision Pro mixed reality headset. Computer glasses that combine virtual and augmented reality will be available in early 2024. The headset will retail 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 scrolling 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 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 wearable devices such as Apple Watch, AirPods, and Beats headphones. It also contains the Apple HomePod wireless speaker and other various gadgets.
Meanwhile, speculation continues that Apple is looking to make a self-driving electric car.
Apple’s earnings report is mixed
Late in the day of Aug. 3, Apple surpassed Wall Street’s earnings target for its fiscal third quarter with matching views for sales. But its forecast for the current quarter was weak, sending Apple shares down 4.8% in the next trading session.
Apple earned $1.26 per share on sales of $81.8 billion for the quarter ended July 1st. Analysts polled by FactSet had forecast Apple earnings of $1.20 per share on sales of $81.8 billion. On a year over year basis, Apple’s profits were up 5% while sales were down 1%.
Apple’s results mark the third straight quarter of declining sales. However, earnings have returned to growth after two consecutive quarters of flat or low earnings.
For the September quarter, Apple expects sales to decline 1.4% year over year.
In the June quarter, Apple’s iPhone revenue fell 2% to $39.67 billion, and it accounted for 48% of the company’s total sales.
Meanwhile, Apple’s Mac computer sales fell 7% to $6.84 billion. iPad tablet sales fell nearly 20% to $5.79 billion.
The company’s next earnings report is likely in late October. This could be another catalyst for Apple stocks.
Apple stock is valued at $3 trillion
In January 2022, Apple briefly reached a market value of $3 trillion, becoming the first company to reach this milestone. But it struggled to stay above this level and did not return to it until mid-2023.
Apple stock closed above the $3 trillion market cap for the first time on June 30. However, it is currently back below this level after the recent decline.
History of Apple
Apple has been an American success story many times over. First, it sparked 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 series of successful innovations that spanned the iMac, iPod, iTunes, iPhone, iPad and the App Store.
The biggest driver of Apple’s recent success is the iPhone. The game-changing smartphone, which debuted in 2007, has generated years of explosive growth and built a loyal customer base willing to buy Apple products and services.
Apple has an installed base of more than 2 billion devices in use today, including more than 1 billion iPhones.
Exclusive Apple Stock Reviews
AAPL stock has an IBD relative strength rating of 86 out of 99. The relative strength rating shows how the share price performance stacks up against all other stocks over the past 52 weeks.
Shares of Apple have an IBD Composite rating of 89 out of 99, according to the company IBD stock check. The composite rating for IBD combines five separate special ratings for basic and technical performance into one easy-to-use rating. The best growing stocks have a composite rating of 90 or better.
Apple was also ranked fifth on IBD’s 2022 Environmental, Social, and Governance (ESG) Top 100 Companies. ESG is an acronym for Environmental, Social, and Governance.
AAPL stock technical analysis
Year-to-date, Apple shares are up more than 45%. It formed a cup base with a buy point of 198.23, according to IBD MarketSmith charts. AAPL stock ended the regular session on September 1 at 189.46.
In a positive sign, Apple stock is trading above the 50-day moving average line. Its relative strength line has also been on the rise lately as it is outperforming the S&P 500.
Apple stock has Classification of IBD accumulation/distribution from C+, indicating lackluster interest from institutional investors.
Are Apple shares being bought now?
Apple stock is not a buy right now, but it could be soon. You must reach a point of buying from a suitable base in the right market conditions. Check out IBD’s Big Picture column for current market direction.
Watch the stock market in general. If the market turns south, don’t try to resist the general trend of the stock market.
To find the best stocks to buy and watch, review the IBD stock listings page. More stock ideas can be found on IBD Leaderboards, Marquette Smith and the SwingTrader platforms.
Follow Patrick Seitz on Twitter at @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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