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As of October 2023, the S&P 500 has increased by 20%, while Apple Inc. (NASDAQ: AAPL) has seen an 18.3% rise year-to-date, underperforming the market by 2 percentage points. The company has a market capitalization of $3.5 trillion but faces challenges, with iPhone sales dropping by 1% to $39.3 billion in its most recent quarter, contributing to a decrease in market share from 17.3% to 15.8%.
Apple’s fiscal year ending June 29 reported a total revenue of $296.1 billion, with the iPhone accounting for 52% of sales. Recently, Apple launched a new iPhone model with AI features; however, initial sales have been disappointing. Service sales grew 14.1% to $24.2 billion, although the U.S. government has raised concerns about Apple’s market practices that may affect profitability.
Apple’s stock currently holds a price-to-earnings (P/E) ratio of 34, surpassing the S&P 500’s P/E of 30, indicating a higher valuation that may not be justified given the declining performance of its core product. Analysts suggest a cautious approach, advising against holding Apple shares due to uncertain growth prospects and ongoing investigations.
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