For perspective, the company has bought back an average of 5% of its stock each year over the last five ***. Apple is clearly in a much better position to navigate the ongoing headwinds compared to other smartphone players. Apple is the most profitable company in the smartphone space by far, with gross margins standing at a solid 42% in Q4 FY’21. This means the company should be in a better position to pay more to secure supply, compared to smaller players, without really impacting its profits. This could mean that Apple will see reasonable supply growth despite shortages.
AI gadgets have been a bust so far. Apple aims to change that
Apple also likely saw a large percentage of commission-driven revenues such as *** sales and subscriptions, which are much more profitable. Apple’s operating expenses rose by just about 12% year-over-year compared to total Revenues which expanded by 21% and this was also a factor that drove its Operating Margin gains, in addition to the Gross Profit gains. Apple stock has rallied by almost 90% over the last 12 months, driven by growing demand for consumer electronics through Covid-19, anticipation surrounding the 5G iPhones, and Apple’s position as a “safe haven” stock. The stock now trades at roughly 30x forward EPS, which is higher compared to historical levels.
The metaverse could be another catalyst
The company has a reasonable chance of challenging Apple’s dominance at the top and could become the next Apple stock if things go well. The tech ecosystem is even more diverse and autonomous driving, AI, digital advertising, blockchain, cloud, and cybersecurity look *** themes worth betting on. Metaverse is another emerging industry but it’s still in the nascent stages. Would you be interested in a stock owned by Warren Buffet’s Berkshire Hathaway?
As it turns out, Huberty estimates that entry into the autonomous electric car market could help Apple double its revenue and market cap in the long run. Thanks to the astronomical rise over the ***, Apple split the stock again in June 2014, this time seven-for-one. Three *** later, in 2017, with Tim Cook at the helm and a services business providing a bulk of revenue, Apple’s stock price is still steadily climbing. So what could be the financial impact of Apple reducing commissions across the board? Apple takes a 30% cut on *** sales and subscriptions (15% from the second year of subscriptions) and we estimate that total commission revenues stood at almost $20 billion in FY’19 (out of a total of about $46 billion in Services Revenue).
It’s also about innovation, the brand, and the ability to please both consumers and investors. There have been instances when Apple lost the top market cap slot, to Saudi Aramco for instance in 2022. However, when we talk about the next Apple stock we don’t exactly think of Aramco. Among other things, Nvidia produces graphics processing units (GPUs) that are essential to the video game industry and are used to mine cryptocurrencies. The company also produces chip sets that power everything from robotics to self-driving cars.
While Apple launched its latest iPhone 13 handsets in September, we don’t expect the device to be a major driver of Apple’s sales, as it was available for sale for just about a week in Q3. However, it’s possible that Apple could be seeing some pressure on device supply, due to the ongoing semiconductor shortage. Apple’s margins are also likely to trend higher on a year-over-year basis, driven by a growing mix of services revenues, higher average prices on iPhones, and other devices. See our interactive dashboard analysis on Apple Pre-Earnings for more details. The new iPhone 12 handsets saw their first full quarter of sales over Q2 FY’21, helping iPhone revenue rise 65% compared to last year. The iPhone is Apple’s most profitable hardware product and the new handset is also priced at a premium compared to its predecessors, helping margins.
- For perspective, the device went on sale only about 3 to 4 weeks into Q1’FY21, with popular models remaining short-supplied.
- In addition to news on the iPhone 16, it is also anticipating the unveiling of the Apple Watch Series 10 and any updates to the company’s Apple Intelligence generative artificial intelligence (AI) initiatives.
- Apple II sold at a minimum $1,298 price point, setting the stage for much bigger cash flow into a growing Apple.
- “E-commerce is not slowing down and Shopify’s platform takes the pulse of entrepreneurs and businesses starting and scaling online.
- Although the revenue impact would be limited for Apple (under 3% of Apple’s Total Revenue) the impact on profits would be more pronounced given that commissions are likely to be almost entirely profit.
Apple II sold at a minimum $1,298 price point, setting the stage for much bigger cash flow into a growing Apple. Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, onetrade forex broker onetrade review onetrade information 2020 Market Realist, and TipRanks.
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Our dashboard Breaking convert swiss franc to swedish krona Down Apple’s Services Revenue estimates the revenue figures for AppStore, Apple Music, Apple TV+, iCloud, Third-party Subscriptions, Licensing, Apple Care, and Apple Pay. So there is a possibility of Apple becoming more than a purveyor of iPhones, iPads, MacBooks, and wearable devices in the coming decade if it can successfully enter the auto industry. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. I generally advise against investors making date-driven decisions but rather focus on the preponderance of the evidence to decide whether or not to buy a given stock — and Apple is no different. There’s little question that Apple (AAPL -0.70%) has been a long-term winner for shareholders.
Docusign bulls argue that Docusign was growing rapidly even before the pandemic juiced revenue and that the demand for digitally signed documents will continue to rise. The online provider of insurance quotes provides aggregated information from a variety of providers to allow consumers to choose where they want to buy their auto, home, medical, life, renters or commercial insurance products. In addition to its popular e-commerce site Shopee, the company also ripple to euro, convert 1 xrp in eur draws revenue from its mobile game publisher Garena and its payment processing platform Sea Money. Get the latest news on investing, money, and more with our *** newsletter.
The next Apple stock could be from the tech or green energy industry.
While Nvidia stock has come off its 52-week highs and lost the title of the world’s most valuable semiconductor company, one can never write it off. The stock has delivered CAGR returns of 47 percent over the last 10 ***, which looks astonishing. Alphabet also has exposure to autonomous driving with its Waymo subsidiary. As the global economy continues to digitize, Alphabet is one stock that would stand to benefit.
But the company’s still-rapid growth and plans to expand its e-commerce offering to Latin America and Europe could prove to be huge opportunities for the company. It’s impossible to predict if Meta’s virtual reality ambitions will come to fruition, but the stock has already climbed back and there’s reason to believe it’s on a path back to a trillion-dollar valuation. You can livestream the Apple event on Apple’s YouTube channel, on Apple.com and on the Apple TV ***. Companies *** Microsoft, Samsung, and Google have tried to sell AI hardware, but with little success so far. Dan Ives, Wedbush Securities senior research analyst, says Apple’s new iPhones will kick off an “AI super-cycle.” He says 25% of the world will wind up accessing AI through an Apple device. The Investment Committee give you their top stocks to watch for the second half.
Tesla is a play on both green energy and tech, given its software capabilities. Given its exposure to high-growth industries *** EVs, solar energy, energy storage, and autonomous driving, Tesla is possibly the best placed to become the next Apple stock. The online real estate innovator went public in the summer of 2020 and the stock rose quickly, but when fears over high-growth stocks with no profits took over the market at the end of 2021, Opendoor *** swept up in the selloff. After Mark Zuckerberg went all-in on the “metaverse,” including a name change and tens of billions of dollars of spending, investors left the stock in droves and the price cratered, going from nearly $380 a share to a low near $88. Despite some slowdowns, experts *** Ameed Alachi, CEO and founder of NFC Tagify, still say that e-commerce is a booming industry. “E-commerce is not slowing down and Shopify’s platform takes the pulse of entrepreneurs and businesses starting and scaling online.