Does Apple Stock Belong in Every Portfolio?
I know, I know. Most investors already own Apple (NASDAQ: AAPL) through assets like index funds or ETFs. That’s not what I mean here though. Is Apple a core holding that belongs in every investor’s portfolio? The most valuable company in the world showed how strong it truly is compared to its rivals this week. While stocks like Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META) all tumbled following missed earnings, Apple topped Wall Street expectations yet again. In the end, Apple was the white knight that saved the market.
Even though its earnings weren’t spectacular, everything is relative. A not-so-great earnings report from Apple is better than a terrible one from any of the companies listed above. The only chink in the armor of Apple was a miss on iPhone 14 sales for the quarter. But this is somewhat forgivable in an economy where consumer demand is declining and we could very well be on the verge of a global recession. You can forgive some people for not thinking it is the best time to buy a $1,500 phone.
Apple is the Best Investment in America
Okay, that might be a bit of a hyperbole. But the stock jumped by 7.5% on Friday and raised the entire stock market on its back. Year after year, quarter after quarter, analysts and investors continue to count Apple out. The argument? Software is better than hardware or there is no way Apple can continue these sales rates. Well, fourteen iPhones later and it seems like Apple is doing just fine.
The numbers from Apple are just staggering. Quarterly revenues came in at $90 billion, more than $1 billion higher than analyst estimates. iPhone revenue came in at $42.6 billion and Mac revenue came in at $11.5 billion, more than $2 billion higher than analyst estimates.
The only other area where Apple fell short was in its services which brought in $19.19 billion compared to estimates of $20.10 billion. This was still a rise of nearly 5% on a year-over-year basis.
How impressive are these numbers? The second-largest company in the world, Microsoft, reported just over half of Apple’s quarterly revenue at $50 billion. That’s a lot of Air Pods!
Apple Stock Outlook 2022
We’re entering a pretty crucial time for the stock market and the economy. The bleak outlook from big tech companies aside from Apple tells us that continued Fed rate hikes could finally be impacting the bottom lines. With declining consumer demand, companies like Apple might see a dip in the fourth quarter.
But the argument of this article is that Apple belongs in everyone’s portfolio. It’s time to stop thinking of Apple as a tech stock. It’s officially a blue-chip stock and it even pays a dividend. In a few more years of raising that dividend and Apple could be a dividend aristocrat. Now imagine that. You can keep betting against Apple, but there isn’t really a strong argument for not owning its stock.
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