Intel (NASDAQ: AAPL) continues to face growth concerns. Apple has seemingly missed the mark when it comes to artificial intelligence, as the Cupertino behemoth has thrown out its plans to construct an electric vehicle, iPhone sales in China have dried up, and the company has even turned to Google for assistance.
From their January highs, Apple stock has dropped almost $20. However, prospective investors should not automatically interpret that as bad news.
Investors "have... been averse to the premium valuation" of Apple stock until lately, notes JPMorgan analyst Samik Chatterjee. Investors may be ready to take a second look at Apple now that its share price isn't quite as premium. Who knows, they might be pleasantly surprised.
Should I still invest in Apple stock? Although Apple stock isn't worth $215 as he formerly believed, according to a note released on Thursday on StreetInsider.com, Chatterjee maintains that it is still worth roughly $210 per share, which is a 20% increase from where it is now, and that it still merits an overweight (buy) rating. Oddly, many of his arguments against purchasing Apple stock concern the company's stock price.
As an example, consider the decline in revenue. Chatterjee bemoans Apple's "one of the lowest growth outlooks relative to the other Mega Cap Tech stocks" due to the company's falling hardware sales and the possibility that government anti-monopoly regulators may impede the expansion of Apple's services operations.
The following growth rates are projected for Apple's earnings over the next five years: 10%, which is less than half of what Amazon is expected to achieve (22% growth rate), 17% slower than Microsoft, and 26% weaker than Alphabet. This data is compiled by S&P Global Market Intelligence.
However, when compared to these other three IT giants, Apple stock is the most affordable at 27 times earnings, although it's closely followed by Alphabet.
That might make Apple seem like a steal in the tech industry. On its own, I do not believe that Apple stock is currently inexpensive enough to warrant a buy recommendation.
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