Analysts are forecasting earnings-per-share increases of nearly 9% this fiscal year and about 6% for 2023, respectable returns for a company as large as Apple. The tech giant is expected to generate $392.5 billion in sales this year and Apple is the world’s most valuable company, with a market capitalization of $2.5 trillion.
The company is generating a huge amount of money from a new line of iPhones as existing customers upgrade and some holdouts ditch Android devices. Apple is also raking in big bucks from its lucrative services unit, subscriptions for iCloud, Apple Music, Apple TV+ and other perks for iPhone, iPad and Mac users.
“All the hype around the iPhone 14 upgrade cycle should help Apple in the near term,” said Jordan Kahn, chief investment officer of ACM Funds. Kahn owns Apple in the ACM Dynamic Opportunity fund.
Wedbush Securities analyst Daniel Ives noted in a report that Apple’s initial order for 90 million iPhone 14 units is about flat with what it ordered for the iPhone. 13, even with “the construction of macro storm clouds”. Apple therefore still expects its devices to sell even if consumer spending slows more broadly.
“It speaks to the underlying demand story that Apple anticipates for this next version of the iPhone with our estimates that 240 million out of 1 billion iPhone users worldwide have not upgraded. been updating their phones for over 3.5 years,” Ives added.
Apple also benefits from the fact that it is a popular stock not only for individual investors but also for Wall Street giants.
Apple is that rare beast, a stock that’s still exciting enough for the growth crowd, but also attractive to value investors thanks to its reasonable price, penchant for stock buybacks to boost earnings and a constantly increasing dividend.