AAPL down 14% from its 52-week high; Is Apple a buy now?

Apple (NASDAQ: AAPL) is not yet a key player in the artificial intelligence (AI) space. Nonetheless, the AI boom, combined with the release of the iPhone 15, has helped Apple’s stock soar 32% year-to-date, outperforming the S&P 500’s return of 12%.

However, a drop in revenue in the most recent quarter has caused the stock to dip 14% from its 52-week high of $198.23. Furthermore, the stock has declined 12% in the last two months.

AI could be a driving factor for Apple

AAPL stock has increased by 882% in the last decade, owing to high demand for its iPhones. However, inflation has had a substantial impact on consumer spending in 2023, resulting in lower iPhone sales.

Yet, the market has reacted positively to the company’s most recent launch, the iPhone 15 series. The increased demand has resulted in a temporary supply shortage. According to Wedbush analyst Dan Ives, the iPhone 15 Pro and Pro Max could make up 75% of the company’s total sales next year. If projections are correct, Apple’s new launch could reverse the company’s downward sales trend.

CNBC reported on September 30 that Apple will release a software update to fix the iPhone 15 overheating issues. In addition, Apple received approval from France’s regulatory agency that the iPhone 12 now passes the country’s electromagnetic radiation regulations. France has now lifted the sales ban.  Both of these positive news could enhance the company’s sales and stock price this year.

To capitalize on this lucrative AI niche, Apple CEO Tim Cook discussed the company’s decision to increase its AI development spending by hiring more British talents to expand the company’s opportunities.

Meanwhile, Bloomberg reported on October 1 that Apple is also working with Microsoft on developing its search engine to replace Google.

AAPL Q4 earnings

Apple will release its Q4 earnings on October 26, and Wall Street analysts expect sales to be in the $87 billion to $92 billion range. Q4 earnings could be in the range of $1.35 to $1.45.

If the upper end of the guidance is met, it could mean sales growth of 2% and earnings growth of 12% compared to Q4 2022.

Despite the recent struggles, Wall Street is bullish on the stock. Apple is a “Moderate Buy,” according to TipRanks, with an average target price of $207.69, implying a 21% upside potential in the next 12 months.

All in all, when it comes to investing in Apple, the company has never let investors down. For growth-oriented investors who believe in Apple’s long-term growth, this dip may be the ideal time to buy the stock.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.