- Apple stock will likely fall below the $3 trillion valuation it reached in the last hours of June.
- Wall Street was disappointed with iPhone sales, but Services hit a record high.
- Apple returned to this rarified $3 trillion air on June 30 while the number of shares have been decreasing.
Apple’s stock price and valuation saga is not new, and this fall below the $3 trillion mark won’t be its last. In January 2022, Apple became the under $2 trillion after what was believed to be investor jitters. These issues were related to the COVID pandemic, but production has since returned to normal. Apple is also about to enter its most profitable period of the year as the company is expected to release a raft of products by the end of 2024.
Analysts at Wedbush are predicting that Apple’s fair valuation could be in the $3.5 trillion range, with a bull case of $4 trillion by FY25. This is due to Apple shifting away from being completely reliant on iPhones and towards Services as a revenue generator, which has been increasing with no end in sight. Although Apple missed the street’s estimates for iPhone sales, the gross margin hit a record high in the quarter.
The Wall Street consensus may be penalizing Apple’s stock due to the small drop in iPhone sales, but the math that investors are using needs to be tailored instead of sticking to the same old treatises that don’t work. Apple CEO Tim Cook has said on multiple occasions that supply channel checks aren’t a reliable indicator of what the company is doing. The $3 trillion mark means nothing for Apple other than investor excitement, and smart investors and analysts will hold.
