Title : Is it time to buy Apple? (From Alvin Ng)

When we talk abouts smartphones, majority people in the world would think of Apple.The products included were Iphone, Ipad and Macitonish computers and recently Apple Vision Pro, an augmented reality headset for consumers around the world. Apple were the first company in the world to hit 3 trillion market cap and were the 2nd biggest market company in the world as of today behind Microsoft after the A.I trend.

On a recent survey from Zipdo, 92% of iPhone users plan to stick with Apple for their next smartphone purchase. An AddictiveTips survey found that 94% of iPhone users would probably stick with Apple, while only 80% of Alphabet's Google Android users were loyal to their current brand (Fool, n.d.). Recently, Apple is now in talks with Google on the potential use of the search engine giant's Gemini generative artificial intelligence model in the next iPhone, as the firm rushes to adopt a technology that has completely changed the digital landscape.

Based off three sources with knowledge of the conversations, the talks are preliminary and the precise parameters of a possible deal have not yet been established. According to one of these individuals, Apple has also conducted talks with other artificial intelligence firms in an effort to harness the potential of a sizable language model that can analyse enormous volumes of data and produce text on its own.  Over the past 10 years, Apple Inc. had an annualized return of 26.00%, outperforming the S&P 500 benchmark which had an annualized return of 10.89%.

Apple cash flow statement is the spotlight among the magnificent seven stock with 116.43B in operating cashflow where the net cash position alone could fund its current dividend outlay for more than four years. While Apple waits for the tech market to bounce back, it is benefiting from consistent gains in its services segment. The digital business includes income from the App Store and subscription platforms like Apple TV+, Music, and iCloud. Services have blown up in recent years, becoming Apple's second-highest-earning segment after the iPhone and delivering attractive profit margins of 70%. By comparison, products' profit margins hover around 36%

Apple on the other hand technical analysis wise, have been on a downtrend movement after failing to challenge the resistance of 199 usd on december 21st and forming a double top and have decrease almost 15% up-to-date at 172.28 which would be a short term support around 167 usd. If the price movement would go lower , the next immediate support would be 157 usd.

Risk factor, Apple isn't reporting growth figures as frequently as it formerly did. In the first quarter of its fiscal 2024, which concluded on December 30, revenue climbed by 2.1%, after declining in the preceding four quarters. For the following three fiscal years, Wall Street analysts project sales will increase at an annualised speed of 4.2% on average. That hardly seems like a cause for celebration. In fact, when compared to the other Magnificent Seven companies, it ranks Apple dead last. Consensus analyst projections predict substantially faster top-line growth for the other six companies. Moreover, recent product of Apple Vision Pro receive mixed reviews from society with a hefty 3500 usd selling price hurting the demand. Apple recently also halted ‘’Project Titan’’ which is developing electric car where Tim Cook (Ceo of Apple) shifted almost 2000 employees to generative A.I efforts. Electric car have been forecast as a demand for future due to Paris Agreement 2050 reduce global greenhouse gases. The exclussion of electric car might be a setback for Apple growth in the future.

With the upcoming U.S election scheduled held on November, the main party of Democratic Party led by president Joe Bidden against Republican Party led by former president Donald Trump shows that the leader of Republican were favourites to win with a probabiltiy of 54.5% against 38.2% source from bet365.com. according to Lee Munson, president of Portfolio Wealth Advisors, “Biden has not been friendly to China, but Trump’s going to be even worse … China is important for American tech stocks both due to its demand and its role in the supply chain, so a president’s policy towards China can move markets

Bottom line , I would maintain equalweight (Hold) for Apple although proving lagging growth among the magnificent seven stocks, but they were backed by a strong balance sheet with plenty of room to expand its ecosystem with big investments and acquisitions. More importantly, that fortress of a balance sheet should reinforce its reputation as a safe haven stock as long as interest rates stay elevated.