AAPL: Will Apple Stock Continue to Beat the Market In 2023 and Beyond?
13 Dezember 2022 - 11:32AM
Finscreener.org
Between December 1982 and
February 1997, Apple (NASDAQ: AAPL)
generated 0% returns for investors. In the last 25 years, Apple
stock has returned a staggering 108,000% and is now the largest
publicly listed company in the world.
The launch of revolutionary
products such as the iPod, iPhone, and iPad initially drove
top-line growth for the company. But the iPhone was a game-changer
for the tech giant. As smartphone adoption rose globally, the
iPhone’s share rose from less than 4% in 2007 to 23.4% in Q4 of
2021. As seen in the below graph, the iPhone still accounts for a
majority of Apple’s revenue.
Apple is a cash cow, and it
enjoys significant pricing power due to its brand value. The
iPhone, in fact, accounts for a massive 80% of total smartphone
profits in the world.
In recent years, Apple launched
new products such as the Apple Watch and AirPods, both of which
generate billions of dollars in annual sales.
Armed with an installed base of
more than two billion, Apple has managed to successfully monetize
this user base and widen its ecosystem further with its Services
business.
Why is Apple Services the most important revenue
driver?
Apple Services includes various
digital services and subscription-based offerings provided by
Apple. These services include the App Store, Apple Music, iCloud,
Apple Pay, and others.
One of the most popular Apple
Services is the App Store, which is a digital platform for
downloading and purchasing mobile applications. The App Store
offers a wide variety of applications, including games,
productivity tools, and lifestyle apps.
Another popular service is Apple
Music, which is a subscription-based music streaming service. With
Apple Music, users can access over 50 million songs, as well as
personalized playlists and radio stations. Apple Music also
integrates seamlessly with other Apple devices, making it easy for
users to listen to their music on any device.
iCloud is a cloud
storage and computing service that allows users to store their
photos, documents, and other data in the cloud and access it from
any device. iCloud offers various productivity tools, such as
iCloud Drive and iCloud Photo Library, which make it easy for users
to access and share their files across devices.
Apple Pay is a mobile payment and
digital wallet service that allows users to make purchases
in-store, online, and in-app using their iPhone, iPad, or Apple
Watch.
In addition to these services,
Apple offers various subscription-based services, such as Apple
Arcade, Apple News+, and Apple Fitness+. Apple Arcade is a gaming
subscription service that offers access to over 100 exclusive
games, while Apple News+ offers access to over 300 magazines and
newspapers. Apple Fitness+ is a fitness subscription service that
offers workouts led by professional trainers and integrates with
the Apple Watch to track user progress.
What next for AAPL stock price and
investors?
Overall, Apple Services are an
integral part of the Apple ecosystem, offering users a wide range
of digital services and subscription-based offerings. These
services provide users with convenient access to content and tools
and help to make the experience of using Apple devices even
better.
In fiscal 2022 (ended in
September) the Services business increased sales by 14% year over
year to $78.1 billion. It is the second largest business for the
company, and annual Apple Services sales are higher than Tesla,
Citigroup, and Intel.
What will be the next
billion-dollar product or service for Apple? Well, itU+02019s
expected to launch the Apple Car (an electric vehicle) in
2026.
AAPL stock has delivered returns
of 760% to investors in the last decade after adjusting for
dividends. But a challenging macro-environment has meant AAPL stock
price is down 23% from all-time highs right now. Investors are
worried about inflation, higher bond yields, and supply chain
disruptions which might impact Apple’s revenue and profit margins
in the all-important holiday season.
Priced at 22.6x times forward
earnings, Apple stock is trading at a discount of more than 25%
compared to consensus price target estimates.
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