{"id":61295,"date":"2023-09-15T07:25:36","date_gmt":"2023-09-15T11:25:36","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/what-you-need-to-know-about-apples-200-billion-tumble-nasdaqaapl\/"},"modified":"2023-09-15T07:25:44","modified_gmt":"2023-09-15T11:25:44","slug":"what-you-need-to-know-about-apples-200-billion-tumble-nasdaqaapl","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=61295","title":{"rendered":"What You Need To Know About Apple’s $200 Billion Tumble (NASDAQ:AAPL)"},"content":{"rendered":"
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Apple (NASDAQ:AAPL<\/span>) is one of the most important companies around, with a peak value of over $3 trillion. It makes up about 1\/12th of the entire value of the US stock market.<\/span><\/p>\n

Apple is worth more than all of America’s regional banks combined.<\/span><\/p>\n

Its sales of $400 billion per year are twice the GDP of New Zealand.<\/p>\n

In 2022, Apple bought back $109 billion in stock. Today, 117 companies in the world are worth that much.<\/p>\n

Apple did the equivalent of buying Medtronic last year via buybacks.<\/p>\n

These are just a few incredible examples of why Apple is such a dominant company, arguably the most important globally, at least to investors.<\/p>\n

But I think it’s important to remember that even the mightiest titans can stumble, fall, or even fail.<\/p>\n

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Apple wiped out more than $200 billion in market cap in about two days.<\/span><\/p>\n

Prayers that the iPhone 15 launch would stem the tide of pain have thus far gone unanswered.<\/p>\n

Several <\/span>have asked me to do an update on Apple, specifically what its growth prospects and valuation look like now.<\/p>\n

So let me look at the good, bad, and ugly about Apple’s $200 billion crash to see whether it’s still worth buying this company and at what price.<\/p>\n

Apple Was Priced As If Nothing Would Ever Go Wrong…<\/h2>\n
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FAST Graphs, FactSet<\/span><\/p>\n<\/figcaption><\/figure>\n

Apple is worth about 25 to 26X earnings. That’s the average PE for 20 years, similar to the 25X that MSFT, GOOG, Meta, and AMZN (cash flow) trade at.<\/p>\n

Big tech is worth about 25X. That’s what objective market fact tells us, based on over a decade of pricing these companies’ good, bad, and ugly.<\/p>\n

Arguing that Apple was a good buy at 32X earnings was pure speculation. It was speculation that plenty of professional Apple analysts were happy to do.<\/p>\n

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FactSet Research<\/span><\/p>\n<\/figcaption><\/figure>\n

Danny Ives of Wedbush has long been the Thomas Lee of Fundstrat. But where Mr. Lee can always come up with a wildly bullish thesis for the S&P (like how it could soar 700% within a decade), Mrs. Ives is the top permabull on Apple.<\/p>\n

He won’t tell you how fast he thinks the company can grow long term. He’ll just tell you the next upgrade cycle is going to be massive and pretend like 32X earnings weren’t already pricing that in.<\/p>\n

$240 on Apple within 12 months is Mr. Ives’s forecast (Melius Research, too).<\/p>\n

Here’s What $240 In 12 Months Means For Apple’s Valuation<\/strong><\/p>\n

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FAST Graphs, FactSet<\/span><\/p>\n<\/figcaption><\/figure>\n

The only times Apple has traded at 36.4X forward earnings, what $240 in a year would represent, was during the Pandemic tech mania and the 2000 tech bubble peak.<\/p>\n

80% Declines... That’s<\/span> What Happens When You pay 36.4X Earnings For Apple <\/strong><\/p>\n

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Portfolio Visualizer Premium <\/span><\/p>\n<\/figcaption><\/figure>\n

Apple can take 7.5 years to break even from such bubble valuations.<\/p>\n

Imagine buying Apple today, as close to God’s own company as it exists, and 7.5 years later, you’ve made no money and lost about 20% due to inflation.<\/p>\n

Is Apple a lousy company? Are you kidding me?<\/p>\n

Look what’s in the Phone! <\/strong><\/p>\n

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Apple<\/span><\/p>\n<\/figcaption><\/figure>\n

Apple is selling $1,200 phones that can be upsold to $1,600!<\/p>\n

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Apple<\/span><\/p>\n<\/figcaption><\/figure>\n

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Apple<\/span><\/p>\n<\/figcaption><\/figure>\n

Apple now sells $800 watches that can be upgraded to a Hermes version for $1,250.<\/p>\n

I don’t care about watches, yet crave one of these $800 monstrosities! That’s how good Apple’s brand is!<\/p>\n

My next phone is an iPhone Pro Max, though I’m not paying for more memory. 256 GB is plenty.<\/p>\n

My next watch, replacing my Fitbit, will be an Apple Ultra watch because I’m a sucker for Apple’s brand.<\/p>\n

But what I plan to do is immaterial. Here’s what matters.<\/p>\n

Apple’s ecosystem is more than 100 products strong, with more than 1.4 billion installed devices used by 1 billion customers.<\/span><\/p>\n

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Worldometer<\/span><\/p>\n<\/figcaption><\/figure>\n

Apple nation is the third-largest nation on earth, with 1\/8th of humanity owning its products.<\/p>\n

And let’s not forget about Apple’s potential $50 billion in sales that a car might generate by 2030 alone.<\/p>\n

What Apple Is Working On Now: The Apple Car <\/strong><\/p>\n

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Dall:E<\/span><\/p>\n<\/figcaption><\/figure>\n

The Apple Car continues secretly, with rumors about 2026 as a potential launch date.<\/p>\n

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AppleInsider<\/span><\/p>\n<\/figcaption><\/figure>\n

Look at the brand power of Apple. Tesla, the king of auto cool, with the top customer satisfaction in the industry (despite poor reliability), could lose up to 50% of its customers to a car that hasn’t even been officially announced yet.<\/p>\n

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A survey of new car buyers reports that a quarter would “definitely consider” an Apple Car, including more than 50% of the Tesla owners asked. – AppleInsider <\/p>\n<\/blockquote>\n

There’s no questioning that Apple is an incredible luxury brand, and that means its money-minting magic could continue not just for decades but for centuries.<\/p>\n

What brands are timeless and seldom worry about losing their moats or aspirational status?<\/p>\n