The company, boasting the world’s largest capitalization, emerged as a gainer in the unstable market of 2023. However, the onset of 2024 witnessed a setback, with Apple stock decreasing for the first four sessions of the year. Let's delve into the reasons behind this downturn and assess whether it casts doubt on Apple's future prospects.
To comprehend the situation, we can examine Apple's stock movements throughout 2023. Over the span of these 12 months, the shares exhibited a remarkable growth of over 50%. If you hold them in your portfolio, it’s another reason to wear a smile more often. Yet, for those seeking alternative investment options, whether among growth leaders or those experiencing a decline, the stock screener is a valuable tool. It allows the formation of stock lists based on various stats, financials, and technicals.
It is interesting that such a great result is still below the average of the FAANG group. The substantial impact of AI advancements is evident here; however, Apple is actively participating in this race.
However, the beginning of the year witnessed a rare event as Apple stock declined in four consecutive sessions, a feat not seen since 1982.
The primary catalyst dampening investor spirits post-Christmas was the media reports suggesting that the Department of Justice is concluding its investigation into the tech company. Apple may face allegations of engaging in anticompetitive practices to safeguard its dominance in the iPhone market. Simultaneously, Apple stock faced pressure due to concerns about potentially weaker-than-expected sales of iPhones and Macs, especially in China.
Yet, the probability and influence of these factors might be exaggerated. News about investigations against tech giants often makes headlines but might only have a significant impact in the very long term. Similarly, the situation with sales might not be straightforward, as weaker sales in one region could be offset by stronger sales elsewhere or an increase in the average price. Apple has demonstrated its ability to generate profits even in challenging conditions.
While Apple stock still maintains a "Buy" rating from analysts, the current target is not particularly impressive, suggesting a potential 7% increase over the next 12 months. In other words, Apple remains a company deserving of attention, but there may be other tech giants, such as Nvidia, with greater potential.
Ultimately, remember that your independent analysis is crucial in deciding which stocks to add to or remove from your portfolio.