Key points
- Apple shares are down nearly 12% year to date, lagging behind competitors and the broader market, which is up 8% year to date and nearly 30% year over year.
- In 2024, Apple lost the top spot as the most valuable company to Microsoft, with Nvidia posing a competitive threat if Apple’s stock doesn’t recover.
- Apple’s RSI at 22.02 indicates oversold conditions, potentially signaling a reversal if the stock finds support near $170.
- 5 stocks we like more than Apple
Shares of the hardware and software consumer products giant Apple NASDAQ:AAPL I had a year to forget. The company’s shares are down more than 12% year to date, bringing its annual performance to a modest 11.5% increase.
Not only does this performance pale in comparison to that of competitors and industry peers, it also falls well short of baseline performance. The overall market has risen to new heights, up more than 8% year to date and nearly 30% from the previous year.
So far in 2024, Apple’s stock has lost the top spot as the world’s most valuable company to Microsoft. If the stock fails to regain its stability soon, it will likely fall to another position thanks to the remarkable growth of Nvidia, which is currently the third most valuable company in the world.
However, with a modest P/E, expected earnings growth, and favorable price targets and ratings from analysts, could this be a good time to buy AAPL stock amid the sharp sell-off? We analyze the latest developments regarding the stock and examine the fundamentals and technical aspects.
Apple’s AI push, recent challenges, and the strength of its financials
Apple is poised to benefit from integrating AI technology into its various products and services, including iPhone, iMac, Apple TV and Siri. This move highlights the company’s commitment to leveraging advances in artificial intelligence to improve user experience and productivity. CEO Tim Cook has highlighted Apple’s strategic focus on artificial intelligence, highlighting its potential for breakthrough innovation and problem-solving capabilities.
During the company’s annual shareholder meeting, Cook’s remarks highlighted Apple’s significant investment in artificial intelligence, particularly in the field of generative AI, which he believes holds enormous promise for the future. Additionally, the CEO lauded the Mac with Apple Silicon Chip as the leading platform for AI-powered computing, further solidifying Apple’s position in the AI landscape.
However, recent developments present challenges for the tech giant. European Union regulators are poised to question Apple’s decision to terminate Epic Games’ developer account, effectively preventing the gaming company from launching Fortnite and the Epic Games Store on Apple’s iOS devices in ‘EU. Epic Games CEO Tim Sweeney has accused Apple of violating new rules in the EU’s Digital Markets Act, triggering the possibility of a legal fight that could result in significant fines for Apple. This incident comes on the heels of a $1.95 billion fine imposed on Apple by the EU for anti-competitive practices in the music streaming market.
Despite these challenges, Apple continues to demonstrate strong financial performance. In its latest earnings report, Apple beat analysts’ expectations with earnings per share of $2.18 for the quarter, driven by revenue of $119.60 billion, topping estimates. The company’s revenue increased 2.1% compared to the same quarter last year, reflecting its resilience in the face of changing market dynamics.
Stocks near major support, analysts see upside
As shares of the global tech giant continue to slide this year, analysts are now predicting the biggest upside for the stock in more than a year. The consensus price target of $205.27 projects a stunning 21.46% upside for AAPL, a move that would see it once again become the most valuable company in the world. Currently, Apple has a Moderate Buy rating based on thirty-three analyst ratings.
From a technical analysis perspective, Apple shares are in oversold territory. Its RSI currently stands at 22.02, indicating that the stock is approaching an extremely oversold level in the near term. The stock also began to extend from several major moving averages downward, approaching a significant support level near $170. If the stock can find support near this region and make a higher low, the momentum could change and the bottom could be reached.
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