By Ryan Vlastelica | Bloomberg
The recent selloff in Apple Inc. shares is an opportunity for investors as the tech giant is still seen by some analysts as a safe haven in periods of market volatility.
Shares fell nearly 11% last week, the stock’s biggest one-week slump since November 2022. Apple’s more than 14% drop this year exceeds the nearly 6% decline of the Nasdaq 100 Index. The stock was down about 1% Monday.
The decline comes as uncertainty over tariffs and the broader economy’s outlook — something that has hammered tech stocks broadly in the past few weeks — exacerbates ongoing concerns about whether the iPhone maker can live up to its status with its stock trading at a premium to megacap tech peers and tepid growth prospects. Apple bulls, however, argue that the company continues to offer traditional quality characteristics, including steady earnings growth and massive free cash flow as a result of its huge base of users.
“At a time of potential economic stress, its stalwart stature as a seller of indispensable devices (arguably staples) with exceptional brand and balance sheet strength, create supportive arguments for the shares, countering the headwinds of a slower than hoped for ramp up in AI, and exposure to Trump tariffs,” wrote Rosenblatt Securities analyst Barton Crockett in a note.
While recent issues — including a delay with the company’s artificial intelligence-infused Siri digital assistant, gave further credence to the view that the company is struggling in the AI era — Crockett said “the iPhone and AI cycle for Apple will improve from here.”
His view is echoed by Ben Reitzes, an analyst at Melius Research, who maintains a positive view on the iPhone’s long-term potential. Both have a buy rating on shares.
Reitzes expects new features and models, including foldable phones, to give a long-term boost to average selling prices, a significant metric for investors.
“Sure, we’d prefer a rapid uptick in units right now and positive media coverage around AI – but sometimes people forget that Apple has multiple long-term levers to support the stock, beyond just growing services,” Reitzes wrote in a note.
He expects iPhone revenue to grow close to 10% in fiscal years 2026 and 2027, “even if Apple sees very limited unit growth.”
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