Apple delivered outstanding results in the first fiscal quarter last week. The morning after the company’s earnings day, after discussing the most important events of this quarter, CNBC host Mad Money Jim Cramer gave a very specific comment on when to buy Apple shares (AAPL) – Download the report from Apple Inc.:
“This has been an extraordinary quarter. So the stocks are on [$164]. My advice is, if it breaks that price and drops to, say, $ 163, then buy it. ”
The problem is that AAPL shares have already jumped far ahead of the “Jimmy Chill” ideal price after the entry price. Even the decline in technology stocks led by Facebook was not enough to push the AAPL much lower than $ 175 per piece.
Does that mean this ship sailed? Is it too late to own Apple shares at a current market capitalization of nearly $ 2.9 trillion?
(Read more from Apple Maven: Apple Stock: 3 key earnings day topics you may have missed)
Jim Cramer’s bull attitudes
First, let’s understand what makes Apple a good stock to own from a business fundamentals perspective, according to Jim Cramer. stated:
“It is very clear that this was about the perfect number you will get. […] Supply problems have diminished as the quarter has progressed, and this quarter will be better. Number of subscribers, they have 785 million, [are adding] for revenue from services – and by the way, there are no default values. China was abnormally strong, [Apple is] 4 top brands there. ”
Very few experts have deviated from the consensus that Apple is on fire. I agree with Jim that this was a remarkable report, even if not flawless – the iPad battled heavy components and component deficiencies.
Of course, this particular discussion on CNBC was too short for Jim Cramer to explore other reasons for owning an AAPL. For example, I believe there are significant revenue opportunities beyond Apple’s current product and service offering – think metaverse and autonomous vehicles. Also, margins should improve as supply disruptions mitigate and services become an even bigger part of the revenue mix.
AAPL and the question of price
On the opportunity to buy Apple shares after earnings and in the midst of a soft market, especially for technology stocks, Jim Cramer added the following:
“If you believe there could be a return [in tech stocks]”Apple is a legitimate place to start.”
I think this is a good move. The stock market was weak in 2022, but mainly due to aversion to companies that do not have short-term earnings and cash flow and that rely too much on stories of distant growth. Apple does not fall into this bucket.
Instead, the Cupertino-based company appears to be a success story in the short term and a potential beneficiary of long-term growth trends. If investors invest their money in technology today, many would probably start with Apple.
But then, there’s the issue of stock price and valuation. Jim Cramer said that AAPL was a purchase at a price of 163 dollars, but the shares have never reached such a low level after the decline in earnings. In fact, since it reached its lowest level of $ 159 on January 27, Apple shares have risen 10% almost unhindered.
Did the ship set sail?
Let’s get back to the key question: is it too late now to own an AAPL? I think no. Of course, investors probably want to be able to buy Apple shares at Jim Cramer’s preferred entry point for $ 163. But that opportunity was left in the rearview mirror.
Consider the bigger picture. AAPL produced an annual return of 32% in the iPhone era (i.e., since 2007). An increase of 10% in the past few days does not necessarily mean that the long-term opportunity for shares has disappeared. Instead, it can simply suggest that expectations of future profits should reduce risk a little.
(Disclaimer: This is not investment advice. The author may have one or more shares mentioned in this report. Also, the article may contain affiliate links. These partnerships do not affect editorial content. Thanks to Apple Maven for support)
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