When Apple (AAPL) reported its fiscal Q4 results, the stock fell slightly. AAPL stock traded at close to a 40 times price-to-earnings ratio before the report. With its business generating $94.93 billion in quarterly revenue, a 6.1% growth rate is still an accomplishment.
China is a weak spot in the report. Revenue of $15.03 billion is below the nearly $16 billion estimate. Chinese customers are grappling with a recession in the country. Additionally, Apple faces higher competition from domestic phone makers. This includes Huawei.
AAPL stock typically falls after profit takers panic by selling. Investors may take advantage of the dip to add to a core position.
Growth Drivers
Apple has Apple Intelligence in iOS 18.1. It is integrating AI into its devices (iPhone, iPad, and Mac). Siri, the Photos app, and the Writing Tools will have AI support. The firm is getting plenty of positive feedback from its customers and developers. Assuming that adoption for 18.1 accelerates, customers may speak favorably about Apple Intelligence. That would take customers away from Microsoft’s (MSFT) CoPilot, Meta Platforms (META) Meta AI, and Alphabet’s (GOOG) Gemini.
Your Takeaway
Apple will invest conservatively in AI. Still, it also announced a debt securities offering. Shareholders would prefer that Apple reduce its debt, increase its dividend payout rate, and buy back fewer shares.
