Is Apple a Good Investment?

PHOTO CREDIT: Apple

OVERVIEW

Apple Incorporation is a company based in the United States. The company designs, manufactures, and sells electronic devices and services around the world. The company makes iPhones, iPads, Macs, Apple Watches, Air Pods, and many other devices. The company also offers services like Apple TV+, Apple Music, iCloud, and many others. The company was founded in 1977.

Why You Should?

  1. Apple is a great growth play in an investor’s portfolio. The company has continued to increase its sale of devices and services by double digits over the past couple of quarters as consumers purchase more Apple products. Though the stock price has not increased by this much, the growth of the stock will follow soon in my opinion.
  2. Apple’s services (Fitness+, Apple Music, iCloud, and more) are the new way Apple is increasing its growth and profitability. On the last earnings call, the company reported that 660 million of its users purchase one or more of the company’s services. This growth will offer the company many sources of recurring revenue and will also help the company grow its business.
  3. Apple has some of the strongest brand recognition in the world. This has helped the company grow and expand its business in the past and will continue to help it grow in the future. Because people will continue to purchase Apple products regardless of the economic times (keep in mind Apple had a record year during COVID), it will benefit the company in the future.
  4. Apple is recently coming off a record year in terms of sales. Some might say that there will be a “peak” in sales but I disagree. I think that Apple will continue to have great quarters of sales because they have great products and they are in high demand. I think that Apple’s record year shows a strong business and is a sign of more good things to come in the future.
  5. Apple will see some positive benefits from a Biden administration. Biden will look to ease trade tensions with countries like China, a country that is critical for Apple’s success. Once these tensions decrease, Apple can continue to grow and China and in other countries around the world. I do not think that anti-trust or higher taxes will be an issue for the company.
  6. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow and expand its product offerings across markets around the world. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 274.51 billion and profits of around 57.41 billion. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 260.17 billion and profits of around 55.26 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Though Apple is a great company, they face tough competition from many other tech companies around the world. Some of these companies include Google, Microsoft, Amazon, Samsung, Xiaomi, OnePlus, and many others. This might hurt the company and its investors in the future.

MY OPINION

I think that Apple is one of the best companies that are traded on the stock market because of its position as a good growth play, its strong services sector, strong brand recognition, a record 2020, the positive impacts from the Biden administration, as well as rising revenues and profits. However, tough competition might hurt the company in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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