Apple (AAPL) stands as a colossus in the corporate world, with a staggering market cap of $2.6 trillion. Over the past decade, the tech giant has bestowed investors with remarkable returns, erupting by 705%. Since April 2004, the growth has been downright stratospheric, soaring to a jaw-dropping 36,750%, leaving broader market indices in the dust.
Yet, in recent months, Apple has staggered behind equity benchmarks, including the S&P 500 Index ($SPX), grappling with a slew of challenges – from regulatory headwinds to tepid growth and a slowdown in iPhone sales across China.
Now trading 15% below its all-time zenith, the burning question arises – is Apple stock primed for a comeback in 2024?
Analysts Predict a Revenue Decline in Q2
Analysts’ crystal ball forecasts a 4.5% dip in sales to $90.6 billion in fiscal Q2 of 2024 (ending March), with adjusted earnings expected to wane by 0.70% to $1.51 per share. The perilous terrain Apple navigates is akin to its peers in the electronics domain, basking in the pandemic boon only to face headwinds post-COVID era.
In China, a market pivotal to Apple’s revenue stream, the tech titan grapples with a 33% slump in iPhone sales from a year ago. Revelatory of the shifting landscape is Apple’s four-quarter revenue descent in fiscal 2023, an unsettling echo dating back to the dot-com bubble of 2001 – a shadow over the once-luminous tech champion.
In contrast, tech brethren like Nvidia (NVDA), Meta (META), Alphabet (GOOG) (GOOGL), and Microsoft (MSFT) have been basking in the artificial intelligence (AI) renaissance, leaving Apple watchers anxious over its AI narrative trailblazing.
Evercore Backs Apple Amid AI Buzz
Evercore ISI’s sanguine forecast rides the wave of Apple’s latest AI expedition. The Cupertino juggernaut’s unveiling of the ReALM language model proves a game-changer, poised to revolutionize the AI sphere. With smaller ReALM models emulating ChatGPT-4’s prowess, Apple’s vast ecosystem enables seamless integration across billions of devices worldwide.
Analyst Amit Daryanani’s bullish outlook stems from Apple’s AI breakthroughs, endorsing an “outperform” badge and a $220 price target on AAPL stock. Daryanani’s vote of confidence hails Apple’s vertical integration, heralding a potential moat expansion around the iOS domain and a shot at catalyzing an accelerated refresh cycle, should the forthcoming AI spectacle dazzle.
Apple’s annual WWDC developer gala, slated for June 10, sparks anticipation with a promised barrage of AI unveilings, possibly a beacon for jittery investors eyeing a buy-in.
On a separate note, Apple’s services segment flaunts potential as a revenue juggernaut in the coming era. Representing 19% of total Q1 fiscal 2024 revenue, the services sector boasts a hefty 73% gross margin, eclipsing the 39% margin on device sales.
What Lies in Store for AAPL Stock?
Among the 16 market seers tracking AAPL, 16 echo a “strong buy” tune, with three rallying behind a “moderate buy.” Eight voices caution “hold,” while one lone sage foreshadows a “strong sell,” painting a consensus panorama of “moderate buy.”
With an average target price of $205.42, a 22% upside dance beckons from current levels – a tantalizing prospect eclipsing past zeniths, beckoning forth the daring.
Upon this piece’s publication, Aditya Raghunath bore no direct or indirect stake in any of the securities cited. All data proffered is for informative purposes solely. Peek at the Barchart Disclosure Policy for further insights.
The sentiments voiced herein reflect the author’s perspective and not necessarily Nasdaq, Inc.’s stance.
