Apple Inc. (Nasdaq: AAPL) may be the most recognizable brand in the world. But does that mean you should buy Apple stock?
Apple has been one of the most successful corporations in the world since its founding in 1976.
From its humble beginnings as a computer company, it has grown to become one of the largest companies in the world, with a market cap of over $2 trillion.
Let’s look at Apple’s current business, as well as its outlook for 2023 and beyond to see if this is a stock worth investing in.
What Does Apple Do?
Apple designs, manufactures and sells consumer electronics, software and services worldwide.
Its products include iPhones, iPads, Mac computers, AirPods headphones and more. It also offers a wide range of services such as iCloud storage, Apple Music streaming and Apple TV+. The company distributes its products through its instantly recognizable retail stores and online sales channels such as eBay, Amazon.com or even its own website.
Apple’s outlook for 2023 looks promising.
As consumers continue to embrace mobile technology and smartphones become increasingly powerful and capable devices, demand for the iPhone is expected to increase significantly over the next few years.
Additionally, with product categories such as wearables (Apple Watch) gaining traction among consumers, Apple is likely to benefit from increased demand in these areas as well. Moreover, the company’s 5G-capable iPhones mean its keeping up with network technology and offering its customers the fastest speeds available in 2023.
Finally, with the proliferation of digital services such as streaming content (Apple TV+), cloud storage (iCloud), music streaming (Apple Music) and more, Apple is likely to benefit from increased revenue from these sources in 2023 as well.
Of course, Apple stock is also contending with a massive tech sell-off as investors worry about increased interest rates hammering the growth prospects of certain companies. (More on that below.)
We’ll see if the positive tailwinds can push AAPL stock higher.
Of course, we could just use Adam O’Dell’s proprietary Stock Power Ratings system as a guide…
Apple Stock Power Ratings
We rate stocks from zero to 100 to let you know how investable a company is in the current market.
And it doesn’t look too great for AAPL as 2023 gets underway.
AAPL’s Stock Power Ratings in January 2023.
Apple stock scores a “Bearish” 37 out of 100 on Stock Power Ratings. That means the system expects AAPL to underperform the broader market over the next 12 months.
Looking a little closer, the individual factor ratings show you how the broader tech sell-off has played out.
Apple scores great on quality (94) and growth (89). That makes a lot of sense considering how much money its bringing in.
But like many other tech stocks, investors have bid up its price over the years and created a stock with valuations that don’t match its profitability. That’s why it scores a 22 on our value factor.
And since the stock has lost 24% of its value over the last year, its easy to see why it sports low momentum (39) and volatility (28) scores.
Bottom Line: Apple stock enjoyed a massive run during the decade-long bull market that ended in 2022. But if you follow Stock Power Ratings, this is one to avoid for now.