Apple‘s (NASDAQ: AAPL) stock rallied roughly 48,660% over the past 20 years and recently hit a new all-time high. Once dismissed as an also-ran of the tech sector, Apple’s introductions of the iPod, iPhone, and iPad under Steve Jobs turned it into one of the world’s most valuable tech companies.
After Jobs passed away in 2011, Apple continued to evolve under Tim Cook with new iPhones, fresh hardware devices like the Apple Watch, and the expansion of its software and services ecosystem. Apple also reinstated its dividend, initiated aggressive buybacks, and invested in next-gen technologies like augmented reality and connected vehicles.
Apple became a trillion-dollar company in 2018 and a $2 trillion company last year. But after those massive long-term gains, investors who don’t already own Apple might be wondering if it’s too late to buy the stock. Let’s examine the bearish and bullish cases for Apple to decide.
Why it might be too late to buy Apple
The bears often cite Apple’s dependence on the iPhone, which generated 54% of its revenue in the first nine months of fiscal 2021, as its main weakness. Apple’s iPhone sales rose this year as more users bought its first lineup of 5G iPhones, but that growth will likely decelerate next year as fewer consumers consider the iPhone 13 to be a crucial upgrade. Intense competition and the commoditization of the smartphone market also remain major long-term threats to Apple’s biggest business.
It’s unclear if Apple will ever deliver another revolutionary product like the iPhone, and the lack of clarity regarding its future plans is worrisome.
Another soft spot is Apple’s dependence on China, which accounted for 19% of its revenue in the first nine months of the year. China is Apple’s fastest-growing market, but it’s also a minefield of unpredictable regulations, tariffs, and nationalism-driven boycotts. If the ongoing trade and tech tensions between the U.S. and China escalate, Apple could be an easy target for retaliatory regulations, taxes, or bans.
The bears will also point out…