Apple is the largest tech company in terms of market capitalization and revenue.
Over the years, Apple has disrupted the way people use technology. The innovation they bring and the anticipation every product creates are key reasons the company is growing year on year.
This article explains why investing in Apple stocks now is one of the best decisions you would make. For investors looking to diversify their portfolio, especially in technology and innovation, Apple is undoubtedly one of the best US stocks to buy. Before you start investing your hard-earned money in global innovation companies, always do your due diligence first [1] and seek expert help.
Apple, however, has attractive profit margins of over 30%, and the market that Apple serves is far from saturated.
Here are a few important reasons why you should invest in Apple stocks today:
1. A Historical Market Cap Of $3 Trillion
On 13th December 2021, Apple closed in on a historical market cap of $3 Trillion.
Over the last year, the Apple share has been up by almost 47%. The company also posted a September quarter record revenue of $83.4 Billion, up 29% year on year, with quarterly earnings per diluted share of $1.24.
The new revenue lines that many investors expect are a possible Apple Car and growth in other categories like 5G wireless mobile networks and 5G-capable phones, apps, and TV.
Up until October 2021, Microsoft was the world’s most valuable company. It was valued at about $2.6 Trillion. But now Apple has passed Microsoft and its stock prices continue to rise up and fetch good returns to investors.
2. A De-risked Price/Earning
Currently, Apple's P/E ratio is at a whopping 31.9x, in line with its average P/E of 31.5x since 2000. Such a high P/E ratio signifies that the stock is overvalued or has high growth potential.
But according to Nasdaq, even at record highs, the APPL stock is still undervalued. That clearly means that Apple will continue to grow, and stock prices will rise further.
If we look at the PEG ratio, it is 2.46 for APPL. Simply put, the PEG ratio is the P/E ratio divided by the growth rate. Theoretically, the lower the PEG, the better since you spend low on future earnings growth. Apple’s PEG makes it an attractive stock with good growth prospects selling at good prices.
3. New Product Launches: MacBooks, AirPods
Apple held its second launch event recently. They introduced new MacBook Pro notebook computers, a lower-priced tier for their Apple Music service, and third-generation AirPods wireless earbuds. The event had Apple stocks increased by 1.2%!
A month before the launch, they announced their second-generation iPhone 13 series, which are incremental to the previous iPhone 12 series. The response for the iPhone 13 sale has been positive. They also announced the Apple Watch Series 7 smartwatches and new iPad tablets.
4. Apple Stocks Are Warren Buffet Approved!
The legendary money manager Warren Buffet’s love for Apple is no secret. That is a ringing endorsement from one of the world’s most successful investors.
By investing in as little as three stocks, Warren Buffet’s Berkshire Hathaway made more than $5.21 Billion around the first week of September. Last year around the same time, Berkshire Hathaway owned 944 million shares of Apple, which Warren Buffet decided to sell. He later acknowledged that Charlie Munger had warned him against selling those and that it was a mistake.
5. The Growth Of Apple Wearables
Apple products have always been a status currency. Lately, Apple wearables are what the fashion and technology conscious are wearing. Last year, Apple wearables generated a record $30 Billion, accounting for over 11% of Apple’s revenue. At the time, Apple noted that its “wearable business is now the size of a Fortune 130 company.”
Until six months ago, Apple saw accelerated growth in the wearable segment. Accessories and wearable revenue climbed nearly 28% year on year, thanks to the strong demand for AirPods, AirPods Pro, and the Apple Watch.
Conclusion
Apple stock has been trending for the last few years and is headed on the growth path even in the future. The leading consumer electronics and personal computer company still makes a solid buy, even after the already sharp rise, given the customer loyalty it enjoys, amazing product launches, and impressive financial performance over extended periods.
The company has a lot of exceptional competitive advantages and a huge cash pile to drive growth with the help of share buybacks and strategic acquisitions, accompanied by an army of talented engineers who drive the organization.
The current stock price also looks attractive, especially given the low overall risk of the company.
If you are looking to invest in global markets and diversify your portfolio for better returns and managed risk, get started by understanding the things to consider in US stocks or talk to the experts now.
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