The past year may have left Apple (NASDAQ: AAPL) investors somewhat disappointed with only a modest 13% increase in share value compared to the Nasdaq-100 Technology Sector index’s 24% surge. Yet, recent market movements hint at the tech giant rekindling its spark.
With a remarkable 33% surge in Apple stock over the last three months, the resurgence can be attributed to the company’s foray into artificial intelligence (AI) and a turnaround in the smartphone market. But can these factors fuel sustained growth and robust returns over the next year?
The AI Drive for Apple
Recent data from market research firm IDC reveals a 6.5% increase in smartphone shipments in the second quarter of 2024. Although Apple held the second-largest market share at 15.8%, its shipments grew only 1.5% year-over-year. However, an imminent launch of AI-enabled smartphones could propel Apple’s shipments.
The introduction of Apple Intelligence, a suite of AI features embedded in iPhones, iPads, and MacBooks, promises enhanced user experiences. From text summarization to audio-to-text transcription, the AI tool’s capabilities coupled with an imminent iPhone upgrade cycle could boost sales significantly. Apple’s PC segment is also set to benefit from this AI integration, with reports suggesting a notable increase in shipments.
Gartner estimates a surge in generative AI-powered devices shipped in 2024, offering Apple a lucrative growth avenue beyond traditional smartphones.
Bullish Analyst Sentiment
Analysts project Apple to close the current fiscal year with $387.4 billion in revenue, an 8% jump from the previous year. The company’s revenue growth is anticipated to remain strong in fiscal 2025, supported by robust MacBook sales and the impending AI smartphone launch.
Lifted price targets from firms like Morgan Stanley and Loop Capital indicate strong optimism regarding Apple’s growth potential. AI-related advancements position Apple for favorable market performance and potentially outpacing analyst forecasts over the next year.
Investors are advised to consider retaining Apple stock in their portfolios, foreseeing a promising year ahead.
Considerations for Investment
Before diving into Apple stock, it’s crucial to weigh investment decisions. While Apple presents compelling growth prospects, other investment avenues may offer even greater returns.
For instance, consider the remarkable growth Nvidia witnessed after being highlighted in investment lists. Planning investments strategically can lead to substantial returns in the long run, as history has demonstrated in various sectors.
Understanding the landscape and seeking expert advice, like that provided by Stock Advisor, can help optimize investment strategies and potentially yield significant returns.
While forecasts are positive, due diligence in investment decisions remains paramount.