Undervalued Stock Ignored on the Nasdaq Current Market
In 2022, tech stocks, including giants like Meta and Amazon, are causing headaches for investors. Despite the Nasdaq plummeting by 34% since the start of the year, Warren Buffett's preferred pick, Apple, remains a standout. Even Apple has suffered, losing 13% since the start of the year, but it's faring much better than its tech peers due to its ridiculously loyal customers and killer business performance.
For instance, iPhone satisfaction hovered around an impressive 98% in the fourth quarter. According to reports, Apple scooped up about 55% of the American smartphone market in September. It's hard for competitors to keep up. Not only did Apple's profits and revenue exceed expectations, but the latter climbed by 8% year-on-year, hitting a whopping $90.1 billion. This massive achievement was made despite economic uncertainty and sluggish consumer spending due to inflation, demonstrating the sheer power of the Apple brand.
Apple is also steering clear of the economic chaos like a boss. With cash reserves of over $122 billion from its operations, Apple is the undisputed cash king. While other tech companies are slashing their expenses, Apple is busily churning out money.
So, with the Apple stock still a good distance from its all-time high (around $182 at the beginning of the year), investors looking for a stable growth opportunity may want to take a second look at this tech titan.
Now, a word of caution: Conflict of interest alert! The bigwigs at the publisher Boersenmedien AG, where this article comes from, have themselves invested in Apple. So, while Apple's fundamentals might be solid, remember, your mileage may vary.
Looking closer, historical data suggests that Apple's stock is known for its resilience and ability to recover swiftly even after significant drops. For example, whenever Apple's stock has plummeted more than 30% from its peaks since 2015, it's bounced back an average of 80% following its first closing below that level[1].
Moreover, Apple's brand loyalty and consumer demand are unmatched. This devoted customer base can help cushion Apple's stock during volatile market swings.
To further strengthen its position, Apple is also diversifying its revenue streams by expanding its services sector. This encompasses Apple TV+, Apple Music, and Apple Arcade, among others. This diversification can help counterbalance any risks stemming from fluctuations in hardware sales and trade tensions[4].
All things considered, the tech sell-off in 2022 isn't all doom and gloom for Apple. Its fundamental strengths and adaptability may turn it into a big winner amidst the current market turmoil. However, as always, keep tariffs and global economic conditions in mind when investing, as they can impact stock performance.
- Despite the tech sell-off in 2022, Apple, due to its resilience and unmatched brand loyalty, remains a promising investment opportunity for those seeking stable growth.
- Historical data suggests that Apple's stock has a tendency to bounce back significantly from drops of more than 30%, demonstrating its ability to recover swiftly.
- Apple's diversification into the services sector, such as Apple TV+, Apple Music, and Apple Arcade, may help counterbalance risks associated with fluctuations in hardware sales and trade tensions.
- Even in the face of economic uncertainty and sluggish consumer spending due to inflation, Apple's 2022 revenues exceeded expectations and climbed by 8%, highlighting the sheer power of the Apple brand.
