Apple Inc. has been having it rough in the last couple of sessions as its share price continues to tank. Apple has not been able to reclaim its $134.54 high and the stock has retreated by more than 16% from that 52-week high. The shares of Apple lost another 1.77% to close at $110.49 yesterday, but the weakness might provide a good chance to buy Apple on the dip.
In contrast, most of the other major tech stocks have made massive gains in their share price in the year to date. For instance, ancient Microsoft managed to make a 16.8% gain in the year to date period, Facebook has gained 31.65% in 2015, Alphabet has gained 40.5%, Amazon as doubled its share price with 108.1% gains and the shares of Netflix have skyrocketed with a 140.9% gain. Apple has a negligible 0.2% gain in the since January 1 2015..
Is Apple a Buy?
Apple fans would still find a number of reasons to support the bullish thesis of Apple. After all, the firm takes 92% of profits in the global smart phone space, it has created new product lines, it recorded the most profitable quarter ever in history, and it sits on more than $200B in its cash reserves. IDC projects that the firm will sell 226 million units of the iPhone this year and the Apple Watch seems to have a decent showing.
Nonetheless, the bearish case for Apple is stronger now than ever before, especially now that 2015 is ending and the firm doesn’t seem to have bright prospects for 2016. To start with, On Monday, Morgan Stanley analysts said that iPhone sales are likely to fall by more than 5% in fiscal 2016. The weak forecast comes at the heels of a 10% drop in the component orders that Apple Inc. placed to its suppliers in the fourth quarter.
Secondly, Apple is in the eye of a tax storm as European regulators prepare to beam their searchlight on the firm’s tax practices. It is still too early to predict how the probe would turn out but Rod Hall of JPMorgan says that Apple might end up getting a bill for as much as $19B if the Commission finds the actions of the government of Ireland were improper.
Apple Watch requires too much work
Apple Inc. might not record massive sales of the Apple Watch in 2016 in the U.S. if most Republicans base their buying decisions on the Jeb Bush’s review of the Apple Watch. Jeb Bush thinks that the Apple Watch is a cool device, albeit one that needs more work before it is perfect.
In his words, the device “requires a lot more work than it needs to. It’s not as intuitive as other Apple products… The battery gets out too quick. I don’t have time to learn all the applications. But it’s cool.”Apple has been trying hard to push the sales of the device but its high price tag, lack of apps, and mixed reviews have been stalling sales growth.