When Apple lost nearly 5% following its quarterly results, the stock drop is one of the biggest blips in the last year. Markets did not like the revenue drop.
Apple posted revenue of $81.8 billion. iPhone sales of $39.67B are 2.5% lower. Mac and iPad sales also dropped considerably. The firm offset the hardware sales decline by increasing service revenue by 8.2% Y/Y to $21.21 billion.
Investors who missed the multi-year uptrend complain about the stock’s valuation. They are not excited to buy the stock at these prices, citing three straight quarters of declining growth. Fortunately for shareholders, few investors are willing to sell their AAPL stock.
Temporary Blip
iPhone sales fell again because consumers are strapped for cash. In addition, Apple did not add enough hardware innovation to encourage its customers to upgrade. For example, the body shape, display resolution, and increase in cameras are “nice to have.”
Next month, Apple will refresh the smartphone lineup with iPhone 15. Customers who skipped iPhone 14 might have saved enough money for the purchase.
Your Takeaway
Apple stock is likely to drop in the coming weeks. It needs to trade below the 30x P/E. Revenue needs to expand, as does profits. Patient investors will have another chance to accumulate AAPL stock at better prices.
