Apple Inc. (NASDAQ: AAPL) has seen a 19% decrease in share value year-to-date, while the S&P 500 has gained about 4%. In the first half of this year, Apple’s revenue grew only 4.4% year over year, prompting concerns about the company’s growth potential as it maintains annual revenues around $400 billion since 2022.
Apple’s sales are heavily concentrated, with the iPhone making up about 50% of total sales, and three product categories (iPhone, Mac, iPad) accounting for two-thirds of total sales. However, the services segment, which contributes to higher profit margins, provides a diversified revenue stream. Analysts suggest that a successful new product could significantly boost sales, citing past successes like the Apple Watch and AirPods.
Currently, Apple is exploring new product categories such as the Vision Pro goggles, which could emerge as future revenue streams. Despite risks of stagnant sales growth, analysts find the risk-reward profile of holding Apple shares attractive, given its historical growth with a limited number of product categories.
