Is Apple Still Worth Investing?

🌟🌟🌟On a day when the S&P500 Index is up at all time high, $Apple(AAPL)$  suffered its single day stock loss since August 4 2023, dropping 4% to USD 171 as investors were worried about the US Department of Justice 's announcement of a wide sweeping antitrust case against Apple for allegedly stifling competition among other smartphone makers and the hefty revenues it takes for 3rd party transactions on its devices.

The plunge wiped out USD 112 billion in market value for Apple, sending its market capitalisation to USD 2.6 Trillion.  However Apple is still the 2nd highest in the world. 

In contrast $Microsoft(MSFT)$  gained 1% on Thursday trading, closing at record USD 429 per share, enjoying the effects of a broad rally and a boost from its unveiling of its first Generative AI focused computers.

Apple has yet to roll out any Generative AI offerings.  Apple's 11% year todate loss is worse than the S&P500 's 10% return year todate. 

Is Apple Still Worth Investing? 

Apple had  a series of negative news recently.  Just this month on March 4, Apple was fined 1.8 billion Euros or USD 1.95 billion by the European Union regulators for thwarting competition among music streaming rivals.  Apple is appealing against the decision. 

Apple also sold 24% fewer iPhones in China in the 1st 6 weeks of 2024 than a year earlier.  This is according to a report from Counterpoint Research. 

In February, Apple cancelled its plan to build an electric car after 10 years of effort in doing so.

However the good news is that Apple is now pouring its funds into AI.  Apple researchers said that they have developed a family of multimodal models.  This refers to an AI system that can interpret and generate different types of data, such as text and images at the same time.  It is called MM1.  The report said that MM1 has superior abilities and can offer advanced reasoning and in context learning to respond to text and images. 

This announcement comes as Apple is expected to unveil several new AI features at its developers'conference in June. 

Apple is looking at a collaboration with $Alphabet(GOOG)$  in licensing and building Google's Gemini AI engine which includes chatbots and other AI tools into its upcoming iPhones and its iOS 18 features. 

A partnership with Google may just be what Apple needs to jump-start its AI ambitions in the intense AI race to be the best. 

Google has invested heavily on ensuring Google remains the default search engine on Apple's Safari browser.  So Google may well be suited for this new partnership. 

Apple still ticks all the core fundamentals of a quality stock.  That has not changed. 

Wall Street Analysts are bullish on Apple with a Buy rating, Target price of USD 204.86, an upside potential of 19%.

The beauty of Apple's business is that it does not depend on one-off transactions. Apple's unique ecosystem and its ability to build products and services around that system makes very loyal lifelong Apple customers and fans. 

One of Apple's most loyal investors is Warren Buffett who has invested in Apple since 2016.  In fact Warren Buffett's Top Holding in Berkshire Hathaway is Apple with 50% weightage. 

 Since 2016, Apple's shares have skyrocketed an incredible 615%.  Apple's powerful brand supports its economic moat.    Warren Buffett's favourite holding period is forever. 

As Warren Buffett likes to say, when there is Fear in the markets, it is time to be greedy.   

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