AAPL stock price continues to push toward its highs, while fundamentally many experts are expressing some skepticism. What to expect from the largest stock in the S&P500?
Over the past three quarters, news that Berkshire Hathaway, the investment firm led by the legendary Warren Buffett, has sold Apple shares for a total of about $516 million has raised questions among investors.
Berkshire’s stake in Apple has been reduced by 56%, at an accelerating pace, and many are wondering how the greatest investor of all time could have made such a clear mistake.
AAPL stock has continued to rise, contradicting expectations that Buffett’s decision could mark a turning point for the technology giant.
This anomaly is raising concerns: does Apple really still have room to grow or are we close to another collapse?
Apple’s valuation: an incredible company, but too expensive?
Apple is undoubtedly one of the strongest and most profitable companies in the world. With a strong brand, a loyal customer base, and an ecosystem of products that fit together perfectly, it has managed to build a true technology empire. However, there are concerns about the valuation of the AAPL stock.
Apple currently trades at a price-to-earnings (P/E) ratio of around 30. For a company as large as Apple, this level of valuation raises concerns among many analysts and investors. Traditionally, this type of multiple is reserved for high-growth companies or companies in emerging sectors. Apple, however, while it continues to innovate and improve its products, no longer seems capable of delivering the growth rates that justify such a high valuation.
Apple’s future challenges: struggling projects and a slow innovation cycle
Another source of concern is Apple’s product pipeline, which seems less promising than in years past. The company recently abandoned its ambitious electric car project, an initiative that many had hoped would revolutionize the automotive industry. It was also confirmed that production of the Vision Pro, the augmented reality headset, will be reduced for 2024 and 2025 due to lower-than-expected demand. Apple is trying to shift its focus to a lower-priced model, but this move signals a lack of enthusiasm from the market for this innovation.
Even the iPhone, which has been the backbone of Apple’s success for years, is showing signs of fatigue. There are already reports of a production cut of the upcoming iPhone 16, suggesting that consumer demand is no longer as strong.
Technical Analysis: What’s Happening in the Stock Market?
On the technical side, Apple is also showing signs of weakness. Although the price is once again heading towards its all-time highs, in the direction of the $240 numeraire, the Relative Strength Index (RSI), an indicator that measures the speed and variation of price movements, has recently started to decline from overbought levels, i.e. above 70, which could be a sign of exhaustion of the bullish force. This divergence between price and RSI is often interpreted as a bearish signal.
Original article published on Money.it Italy 2024-10-15 16:54:50. Original title: Apple, nuovi massimi oppure assisteremo a un grande crollo?
