As part of a sell-off of tech stocks during the first few weeks of September, Apple‘s (NASDAQ:AAPL) market capitalization quietly took a $500 billion haircut. While shares seemed to find a bottom on Monday when the stock rose 3%, the tech giant’s stock is still notably down 20% from an intraday high on Sep. 1…
With a fifth of Apple stock’s value getting erased in less than a month, is this a good buying opportunity? Or is there merit to the stock’s much lower price?
After a 20% sell-off, Apple stock is definitely worth taking a closer look at. The tech company has been firing on all cylinders recently, pulling off a quarter of double-digit top- and bottom-line growth during a pandemic.
During Apple’s third quarter of fiscal 2020, which ended on Jun. 27, the tech company managed to grow revenue across every product segment and region. The strong growth captured the company’s incredible resilience; Apple suffered many store closures during the period, yet demand remained robust. Total fiscal third-quarter revenue rose 11% year over year and earnings per share jumped 18%, marking a record June quarter for the company.
While Apple’s broad-based momentum in fiscal Q3 was noteworthy, there are some specific catalysts on the horizon for Apple that are worth calling out.
First, there’s the upcoming launch of new iPhone models. New versions of Apple’s popular smartphones are expected to debut in October. Accounting for over half of Apple’s revenue, the new devices could move the needle for the tech company’s business. Many analysts expect the new iPhones to feature 5G connectivity — a potential key selling point for the segment.
Then there are Apple’s fast-growing wearables and services businesses. Trailing-12-month services revenue is up 19% year over year. Trailing-12-month wearables, home, and accessories revenue is up 32% over this same time frame. Together, these two segments account for approximately 30% of Apple’s revenue, encapsulating a major long-term growth opportunity for the company.
Apple stock: Buy, sell, or hold?
With momentum like this, Apple is a stock worth owning. But is it a buy at the level it’s at today?
Unfortunately, Apple’s current valuation is still very pricey — even after the stock’s downturn. The company is trading at…
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