Will Apple Stock Grow In 2024?

Apple Inc. (NASDAQ:AAPL) shares soared after its most recent earnings release but whether the stock can keep going this year is a looming question. The former garage startup has grown to become one of the most valuable and disruptive companies in the world.

In its earnings report, CEO Tim Cook announced plans to integrate AI into almost every facet of the firm’s business in the coming years, continuing a trend of rolling out game-changing products and services.

With the advent of generative AI, the technology space is evolving faster than ever before, and Apple is uniquely positioned to adapt to the new technology and redesign its future.

Apple is also spreading its tentacles geographically in almost every emerging market and has plans to deepen its reach within Saudi Arabia and the Middle East too.

From AR and VR via Vision Pro to AI alongside expansions into the the health and wellness market coupled with subscription-based businesses, Apple has a very bright future.

It has long been a darling for both individual and institutional investors for decades thanks to its high customer loyalty, reputation for quality products and, not least, its financial performance that features abundant cash reserves. So where does the ceiling lie?

What Vision Pro Means For Apple

Apple deploys enormous sums of money into research and development. Some reports revealed that Vision Pro material science alone demanded dozens of PhDs alone to identify the right mixture that would be both comfortable and light, expandable and flexible. 

Apple’s latest hardware, in particular Vision Pro, reveals how the brand leader in product design is keenly focused on being innovative and transformative. Most importantly, it can’t and won’t be left behind. Just because Meta had developed Oculus, Apple couldn’t risk a transformative shift in consumer behavior migrating to a new hardware, and so it reacted and built a much higher grade device.

But keeping up with the competition is one thing and market adoption is another, so how did consumers greet the new device?

The most hyped and awaited launch of this year was Apple Vision Pro, which is no ordinary virtual reality headset but, as Apple calls it, “spatial computer.” This term refers to the seamless merging of the digital world with the physical world using a three-dimensional interface.

While the high price point of around $3,500 and the new experience might take some time to gain wide adoption, the device itself reinforces Apple’s interest in venturing into the augmented reality and virtual reality spaces, which are gradually expected to be adopted by the mainstream. 

The Upgrade Cycle Mints Profits For Apple

Beyond launching new product lines and creating new revenue streams, Apple is known for its consistent upgrade cycles and débuting new versions of its existing pipeline of iPhone, MacBooks, and iPads.

Earlier this year, the company revealed the new MacBook Air with the powerful M3 chip, which will deliver much higher power efficiency as well as portability. When compared with the model with the M1 chip, the new MacBook Air is 60% faster.

It has also proven to be 13 times faster than the Intel-based MacBook Air. The M3 upgrade and its associated performance enhancements are set to be transformative for the product category. In addition, a new iPhone with sizable upgrades is forecast to arrive later this year.

When you combine the upgrade cycles with more product SKUs, the combination has been to produce enormous financial success with Apple eclipsing $3 trillion in market capitalization. And yet the best may well be set to come.

Apple Buys AI Firm

Microsoft Corporation’s (NASDAQ:MSFT) involvement with OpenAI was a key catalyst to help it bump Apple off the top spot as the most valuable business in America.

However, Apple has stepped up its investment in AI and is focusing on taking a game-changer role in inspiring productivity and developing efficient solutions. For example, on the generative AI front, Apple recently acquired AI app startup DarwinAI. CEO Tim Cook has stated a clear plan to deploy Generative AI in its devices. 

Apple is also strategically invading the healthcare industry by integrating health monitoring and disease prevention capabilities into its huge list of widely desired and bought products.

The Apple Watch, which is now the key cornerstone of Apple’s health and fitness marketing strategy, is able to provide features like a built-in blood oxygen level sensor, sleep tracking algorithms, and pulse monitoring.

The firm is trying to tap further into the booming health-and-fitness tracking market, which might drive a significant portion of its earnings in the future. The worldwide fitness tracker market is expected to grow at a CAGR of 8.5% worth approximately $103.30 billion by 2028.

The company’s last quarterly revenue stood at $119.6 billion, reflecting an increase of 2% from the same period in the previous year. Moreover, the installed base of active devices surpassed 2.2 billion to register an all-time high. Also, the December-ended quarter saw a record EPS of $2.18, which marks a rise of 16% from the prior year.

Why Is Apple Focusing on Emerging Markets?

The tech giant has been under competitive pressure and weakened demand in the last several months in key markets, translating to sluggish stock price performance up until the most recent earnings announcement. The stock had been punished by sellers, down around 13.4% from the beginning of the year before finally bouncing back.

In China, Apple has been outperformed by rivals to the point that there has been a significant drop in the demand for smartphones. Over the years, China has remained an important market for Apple’s business growth. As such, this setback prompted management to look for opportunities in emerging markets like Vietnam, India, and Indonesia, where Apple’s activity had previously been limited over the years.

Apple is now reportedly growing by double digits in emerging markets apart from the US, which was responsible for most of the shipment volume increases last year.

In spite of the Chinese smartphone share of market declining, Apple attributed 50% of the global revenues to smartphones, the highest ever percentage during a full year.

Emerging markets are likely to provide Apple with renewed opportunities to expand. Tailoring its product assortment, price points, and supply chain infrastructure may be necessary for Apple to meet localized demands and expectations of customers in these parts of the world.

On the other hand, strategies that Apple has been undertaking include launching affordable iPhone models, offering financing options, and growing the number of retail stores in emerging markets to provide wider access to products.

For shareholders, there is solace to be had seeing management so committed to boosting the top line through emerging market expansion and new product innovation.

Will Apple Stock Grow In 2024?

According to 42 analysts covering Apple, the share price is forecast to rise up to $201.16 per share in 2024 before reaching fair value.

The company has a solid financial track record, numerous products in its lineup, and a brand name that is second to none.

With a history of consistently delivering capital returns to shareholders via dividends and share buybacks, Apple provides investors with both stability and growth. Apple’s dividend payouts have increased by more than 5% on a CAGR basis over the past five years.

Trading now at a 27.9x earnings multiple, Apple doesn’t appear particularly cheap but it’s a very hard stock to bet against long-term. And in the words of one analyst, it’s better to hold Apple, not trade it.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.