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Originally Posted by ScarecrowBoat
Apple's price is based on "fantastic" earnings. It's getting hurt as people start to realize that it's days of rabid growth are ending. 2 years ago when its market cap was "only" 400B it had some room. As it encroaches on 700+ it just can't go up much more as it will never grow large enough to sustain the income needed to justify that large of a market cap over a reasonable time frame. If you buy Apple stock right now, it could be well over 15 years before it could even conceivably double again (if at all) whereas other tech companies aren't as solid financially but have much more room to grow.
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Not sure why fantastic is in quotes. AAPL's earnings are in reality, nothing short of fantastic. They are insane.
Agreed, AAPL will need to continue to look to other areas for growth, but guess what? They can buy growth. And it's insane what they can buy in cash alone. They could buy a TON moron if they exchanged stock, used cash, and even borrowed. Just looking at cash here...
They could buy, NFLX, TSLA, and IBM. Think about that, they could buy IBM, NFLX, and TSLA almost entirely in cash. (this ignores a premium that probably would have to be paid, but looks at current market cap).
WIth $200b+ they could buy the entire Walt Disney Company.
And guess what again? They make $10b in profit every single quarter and it's growing. Their growth is actually incredible (35% in earnings y/y) and they still have China and India to grow.
Not saying this is the perfect company, but the numbers are insane. The ecosystem and "Stickiness" of their customers are insane. Macbook has tons of room to run.
iPad has room in enterprise (partnering with IBM right now).
The watch is not done. People forget the iPhone wasn't even a smash hit in the beginning. It takes time. It takes apps. It takes marketing and tweaking. They can make a nice little business out of the watch.
They can also drop a bombshell that they are buying TSLA and building a car by 2020 and I guarantee the stock would immediately go to $150+, maybe higher.
Wallstreet wants a story. While I criticize AAPL for not hyping the stock more, they can turn that around by just dropping a few bombshells while also crushing the smartphone industry.
I'd say if you have the balls and the patience, hold AAPL because there could be some insane news around the corner. Their earnings and cash position are too powerful for them to just whither away.
iPhone is stronger than ever...nothing has changed except the stock price and everyone knows AAPL is one of if not the most manipulated stock on Wallstreet.