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The Zacks Analyst Blog Highlights Apple, Alphabet, Microsoft and Amazon
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For Immediate Release
Chicago, IL – September 11, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Apple Unveils AI-Powered iPhone 16: Buy, Sell or Hold AAPL Stock?
Apple unveiled the AI-powered iPhone 16 line-up of devices on Monday. The iPhone maker introduced Apple Watch Series 10, as well as AirPods 4 and AirPods Pro 2.
The new iPhone 16 and iPhone 16 Plus are powered by the new A18 chip, delivering better performance and efficiency, as well as a big boost in battery life. Both models feature Camera Control that includes a 48MP Fusion camera with a 2 times Telephoto option.
The premium iPhone 16 Pro and iPhone 16 Pro Max are powered by an A18 Pro chip. These devices feature a new 48MP Fusion camera with a faster quad-pixel sensor that enables 4K120 fps video recording in Dolby Vision.
The devices feature Apple Intelligence, which Apple unveiled at its annual developers’ event. It is an advanced personal intelligence system seamlessly integrated into iOS 18.1, iPadOS 18.1 and macOS Sequoia 15.1. It will be available from next month.
Apple Intelligence is expected to be a game changer for AAPL stock, driving iPhone sales. However, is that enough to attract investors?
Let’s analyze the role Apple Intelligence is expected to play in driving Apple’s prospects.
Will Apple Intelligence Aid AAPL Stock’s Prospects?
Leveraging the power of GenAI models, Apple Intelligence aims to enhance user experience across iPhone, iPad and Mac by combining robust language and image understanding with personal context. This technology, powered by Apple silicon, promises to simplify and accelerate everyday tasks while maintaining Apple’s stringent privacy standards.
Apple Intelligence will be first available in U.S. English and will be expanded quickly to include localized English in Australia, Canada, New Zealand, South Africa and the U.K. in December. Additional language support – Chinese, French, Japanese and Spanish will be available next year.
Siri, powered by Apple Intelligence, becomes more natural, contextually aware and capable of handling complex tasks. Users can communicate with Siri using both voice and text, and the assistant can now maintain context across multiple requests.
The new writing tool helps users rewrite, proofread, and summarize text everywhere, including mail, notes, pages and third-party apps.
Photo features get enhancement as the Movie feature now allows users to create the movies they want to see by simply typing a description. The new Clean Up tool identifies and removes distracting objects in the background of a photo without altering the subject.
Apple has integrated ChatGPT into its platforms, allowing users to access its expertise directly within iOS 18, iPadOS 18 and macOS Sequoia.
AI Focus & Services to Aid AAPL’s Top-Line Growth
Apple has been playing catch-up in the AI space with Alphabet, Microsoft and Amazon, its peers in the “magnificent seven” group. Following the launch of Apple Intelligence, its competitive position is expected to improve.
Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged its strong growth driver. In the fiscal third quarter, Services revenues grew 14.1% year over year to $24.21 billion and accounted for 28.2% of sales.
Apple expects the September-end quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as the June-end quarter on a year-over-year basis. For the Services segment, Apple expects a double-digit growth rate, similar to the first three quarters of fiscal 2024.
Apple Shares Overvalued
The AAPL stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.
AAPL Shares Trade at a Premium
Apple is trading at a premium with a forward 12-month P/E of 29.43X compared with the sector’s 24.76X and higher than the median of 27.68X, reflecting a stretched valuation.
Apple Underperforms Sector
Apple shares have returned 23.1% year to date, underperforming the Zacks Computer & Technology sector’s appreciation of 23.9%.
What Should Investors Do With AAPL Stock?
Apple’s AI push is attractive for growth-oriented investors. The Services business has emerged as AAPL’s new cash cow with an expanding content portfolio for Apple TV+ and Apple Arcade. An expanding user base of more than 2 billion active devices makes Apple’s investment profile attractive.
However, Apple’s sluggish China business has been a headache. Greater China sales decreased 6.5% year over year to $14.73 billion, accounting for 17.2% of total sales in the fiscal third quarter.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Apple, Alphabet, Microsoft and Amazon
For Immediate Release
Chicago, IL – September 11, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Apple Unveils AI-Powered iPhone 16: Buy, Sell or Hold AAPL Stock?
Apple unveiled the AI-powered iPhone 16 line-up of devices on Monday. The iPhone maker introduced Apple Watch Series 10, as well as AirPods 4 and AirPods Pro 2.
The new iPhone 16 and iPhone 16 Plus are powered by the new A18 chip, delivering better performance and efficiency, as well as a big boost in battery life. Both models feature Camera Control that includes a 48MP Fusion camera with a 2 times Telephoto option.
The premium iPhone 16 Pro and iPhone 16 Pro Max are powered by an A18 Pro chip. These devices feature a new 48MP Fusion camera with a faster quad-pixel sensor that enables 4K120 fps video recording in Dolby Vision.
The devices feature Apple Intelligence, which Apple unveiled at its annual developers’ event. It is an advanced personal intelligence system seamlessly integrated into iOS 18.1, iPadOS 18.1 and macOS Sequoia 15.1. It will be available from next month.
Apple Intelligence is expected to be a game changer for AAPL stock, driving iPhone sales. However, is that enough to attract investors?
Let’s analyze the role Apple Intelligence is expected to play in driving Apple’s prospects.
Apple Inc. price-consensus-chart | Apple Inc. Quote
Will Apple Intelligence Aid AAPL Stock’s Prospects?
Leveraging the power of GenAI models, Apple Intelligence aims to enhance user experience across iPhone, iPad and Mac by combining robust language and image understanding with personal context. This technology, powered by Apple silicon, promises to simplify and accelerate everyday tasks while maintaining Apple’s stringent privacy standards.
Apple Intelligence will be first available in U.S. English and will be expanded quickly to include localized English in Australia, Canada, New Zealand, South Africa and the U.K. in December. Additional language support – Chinese, French, Japanese and Spanish will be available next year.
Siri, powered by Apple Intelligence, becomes more natural, contextually aware and capable of handling complex tasks. Users can communicate with Siri using both voice and text, and the assistant can now maintain context across multiple requests.
The new writing tool helps users rewrite, proofread, and summarize text everywhere, including mail, notes, pages and third-party apps.
Photo features get enhancement as the Movie feature now allows users to create the movies they want to see by simply typing a description. The new Clean Up tool identifies and removes distracting objects in the background of a photo without altering the subject.
Apple has integrated ChatGPT into its platforms, allowing users to access its expertise directly within iOS 18, iPadOS 18 and macOS Sequoia.
AI Focus & Services to Aid AAPL’s Top-Line Growth
Apple has been playing catch-up in the AI space with Alphabet, Microsoft and Amazon, its peers in the “magnificent seven” group. Following the launch of Apple Intelligence, its competitive position is expected to improve.
Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged its strong growth driver. In the fiscal third quarter, Services revenues grew 14.1% year over year to $24.21 billion and accounted for 28.2% of sales.
Apple expects the September-end quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as the June-end quarter on a year-over-year basis. For the Services segment, Apple expects a double-digit growth rate, similar to the first three quarters of fiscal 2024.
Apple Shares Overvalued
The AAPL stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.
AAPL Shares Trade at a Premium
Apple is trading at a premium with a forward 12-month P/E of 29.43X compared with the sector’s 24.76X and higher than the median of 27.68X, reflecting a stretched valuation.
Apple Underperforms Sector
Apple shares have returned 23.1% year to date, underperforming the Zacks Computer & Technology sector’s appreciation of 23.9%.
What Should Investors Do With AAPL Stock?
Apple’s AI push is attractive for growth-oriented investors. The Services business has emerged as AAPL’s new cash cow with an expanding content portfolio for Apple TV+ and Apple Arcade. An expanding user base of more than 2 billion active devices makes Apple’s investment profile attractive.
However, Apple’s sluggish China business has been a headache. Greater China sales decreased 6.5% year over year to $14.73 billion, accounting for 17.2% of total sales in the fiscal third quarter.
Apple currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.