Determining Apple's stock worth involves analyzing where the company invests its money. Investors looking for companies with the potential to dominate new markets may look for aggressive growth stocks that invest profits back into operations. However, more conservative investors looking to see a more significant percentage return on their investment may want to look for value stocks mispriced by the market.
Is Apple a growth stock or income stock? What can investors expect from the company in the future? While Apple is considered a growth stock, it also presents opportunities for value investors. Read on to learn more about the rich company history of Apple and what we might expect in terms of future stock price changes.
Overview of Apple
It's only possible to discuss technology in the United States by mentioning Apple Inc. NASDAQ: AAPL. Apple is one of the most well-known tech companies in the world, best known for producing the iPhone series of cellphones, which maintains an estimated 53% share of the domestic smartphone market. Apple is also well-known for its Mac computers, iPad series of tablet devices and streaming services like Apple Music and Apple TV. In May of 2023, Apple had a total market capitalization of more than 2.7 trillion, qualifying it for inclusion in some of the largest tech ETFs on the market.
Steve Jobs and Steve Wozniak famously started Apple in 1976. Initially operating out of Jobs' garage, the company quickly gained a following for its innovative personal computer, the Apple II, launched in 1977.
In the 1980s, Apple released the Macintosh, the first computer to feature a graphical user interface and a mouse. Despite its initial success, the company struggled in the 1990s, losing market share to competitors like Microsoft. However, Apple underwent a major turnaround in the late 1990s when Jobs returned as CEO and oversaw the iMac development, which helped revive the company's fortunes.
Apple growth continued throughout the 1990s and 2000s, becoming a household name best known for its continuous product innovation. Releases like the iPod and Apple Watch kept the company in favor of tech enthusiasts and those who prefer a more streamlined user experience. Today, Apple is one of the most valuable companies in the world, operating in 175 unique countries and designated residential regions.
Earnings
Apple's most recent earnings report may indicate a more conservative approach to growth moving forward. While the company reported a revenue of $94.8 billion (down about 3% year after year), Apple CEO Tim Cook emphasized that continued expansion of service infrastructure meant investors could expect more growth in the future. Sustainability and responsible growth were also hot topics.
Image: Apple's most recent earnings report indicates it plans to continue investing in growth.
"We are pleased to report a record in services and a March quarter record for iPhone despite the challenging macroeconomic environment and to have our installed base of active devices reach an all-time high," said Cook. "We continue to invest for the long term and lead with our values, including making major progress toward building carbon-neutral products and supply chains by 2030."
Products
Known for its innovation, Apple's continuous product releases and improvements contribute directly to its growth and stock value. While considering what Apple stock in 10 years will be worth is essential, investors should always keep their eyes on new releases when determining currently undervalued stocks.
Image: Keeping track of social media sentiment can help gauge how the public reacts to new product releases — a key driver of investor growth.
Apple's 2023 product lineup includes the iPhone 15 and 15 Pro, which will be the first two iPhone models to introduce USB-C instead of lightning charging features. The Apple Watch Series 9 is anticipated to be released in September of 2023 and may feature enhanced use of biometric data to provide personalized health data points.
Opportunities for Growth
As a major component of every tech index, Apple has several opportunities for growth across various areas. Geographically, Apple has been increasingly expanding its retail presence in countries like China and Idea, which present opportunities to access new customer bases.
Apple has also been investing heavily in augmented reality (AR) technologies and has already released AR-enabled apps for the iPhone and iPad. As AR continues to become more mainstream, Apple has an opportunity to develop new products and services that leverage this technology.
Apple has been making inroads in the growing healthcare industry with products like the Apple Watch, which can monitor heart rate and other health metrics. As healthcare becomes increasingly digitized and personalized, Apple has an opportunity to expand its offerings and develop new healthcare-focused products and services. Investors may see the potential for a personalized intersection of health improvement and tech in the Apple Watch in particular, which can do things like track sleep patterns and enable reminders to take medications.
Stock Price and Technical Analysis
Technical analysis is a type of stock analysis that determines short-term price movements by examining shifting prices and purchase data. Analyst ratings of Apple have remained consistently positive, awarding the company an average rating of a "moderate buy." While the stock's predicted upside has dropped in the last three years, this indicates that Apple stock has risen in price alongside analyst predictions.
Image: Monitoring analyst ratings and price targets can help newer investors predict how stock prices will likely move.
Latest Apple Stock News
The most recent product rumor that may influence Apple's stock price is its new mixed-reality headset. The headset, which should release in late 2023, is anticipated to feature two 8K displays with a higher refresh rate, a powerful processor and a fan to prevent overheating. It may also include a passthrough camera, allowing users to see the real world without removing the headset. This feature can be a useful safety function for use in small spaces or by children.
What is a Growth Stock?
Is Apple a growth or value stock? Before determining Apple's classification, it's important to differentiate between these two types of sometimes-overlapping investments. A growth stock is a type of stock issued by an underlying company that shows the potential for above-average growth soon. This growth might be in areas like revenue or earnings growth or physical growth like expansion into new markets.
Growth companies accomplish these goals by reinvesting profits back into company operations rather than returning a portion of income to investors through dividends. This means that growth stocks provide less of an immediate return to investors. However, investors see higher returns through share price increases if the anticipated growth occurs.
What is a Value Stock?
Investors with a long-term focus may want to focus on finding value stocks over growth stocks. A value stock is an undervalued stock in the current market, trading at a lower price than what it's worth (the intrinsic value of the stock). A company's intrinsic value is based on its assets, earnings, cash flows and other factors and measures its true worth.
Value investors analyze company financials relative to stock price to identify stocks trading at prices lower than their intrinsic value. Most value stocks are blue-chip companies and represent comparatively stable investment options. Value stocks are often less risky than growth stocks, as more mature companies often issue them.
How to Categorize Apple Stock
When classifying Apple, most analysts consider the company's investment pattern consistent with growth companies. Apple is primarily known as a growth stock because it devoted most of its free revenue to research and the development of new products — a major feature of growth-oriented companies. Apple also showcases a lower dividend yield than income stocks, though many growth stocks offer no dividends.
Future Apple Outlook
How much was Apple stock in 2000? Apple stock closed at a price lower than 25 cents for much of 2000, less than three decades ago. This tremendous growth has set Apple on a path of success to today when it is now one of the most important companies in the world. Future outlook for Apple is positive, with exciting projects like re-imagined virtual headsets and iPhone functionality set to be released to consumers in 2023 and early 2024. While no company can guarantee future success or growth rates, Apple is on a positive, proven trajectory when considering its company history.
Consider Investing in Tech for Growth
If you're a tech investor looking for growth-oriented opportunities, know that investing in individual companies may increase your risk of losses. Instead, consider a growth-centered tech ETF like the Technology Select Sector SPDR Fund NYSE: XLK.
This ETF, for example, invests about 23% of its assets into Apple, but also provides exposure to many other major names in tech. If you're a newer investor looking for exposure to Apple with less risk of capital loss, XLK or another tech ETF can be a stronger choice.
FAQs
Ready to continue learning more about the growth rate of Apple and additional growth-based investments? The following answers some of the top questions you might have when considering the value of Apple stock in 5 years and beyond.
Is Apple a growth or dividend stock?
Is Apple a growth or income stock? Apple can be considered a growth and dividend stock, depending on your perspective and investment timeline. Apple is a growth stock known for its innovative product development and consistent revenue and earnings growth. However, the company's shares also produce a constant dividend yield of about 0.56% as of 2023.
Is Apple still a growing company?
Yes, Apple is still a growing company. While it's one of the largest tech giants in the world, the company also continuously reinvests back into brand innovation, continuously elevating Apple stock worth and its growth rate Apple brand. For example, 2023 should bring the release of the iPhone 15, a new generation of Mac computers and potentially a high-end VR/AR headset.
What type of stock is Apple considered?
Apple is, first and foremost, a growth stock. The company reinvests large portions of its profits into research and development, fueling new product releases and market investigations. However, depending on your perspective, Apple's stable valuation and consistent revenue growth can also signify that it has the characteristics of a value stock.
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