Is It Too Late to Buy Apple Stock?

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Being a shareholder of Apple (NASDAQ: AAPL) hasn't been easy over the last year. The stock has risen 5% since last May, which is abnormal for a company that regularly outperforms the S&P 500 (which grew 25% in the same period).

Spikes in inflation in 2023 caused reductions in consumer spending, leading Apple to post four consecutive quarters of revenue declines.

However, the company appears to be turning things around in 2024. After missing earnings estimates for all of last year, revenue aligned with forecasts in the first quarter of 2024 and beat them in the second quarter.

Apple still has a lot of work ahead as it restructures to depend less on iPhone sales over the long term and expands in artificial intelligence (AI). But the company's significant cash reserves and nearly unrivaled brand loyalty suggest its shares remain an attractive investment for patient stockholders.

So, here's why it's not too late to buy Apple stock.

Beating expectations alongside the biggest stock buyback in its history

Shares in Apple have climbed 5% since the company released its second-quarter 2024 earnings on May 2. During the quarter, revenue dipped 4% year over year to $91 billion, yet beat analyst forecasts by $190 million. Earnings per share came in at $1.53 against expectations of $1.50.

Its iPhone business took another hit in the quarter, with sales falling 10%. The company said COVID-related supply strains during the previous year saw Apple realize $5 billion in delayed iPhone 14 sales. CEO Tim Cook said, "If you remove that $5 billion from last year's results, we would have grown this quarter on a year-over-year basis."

The bright spot of the quarter came from the company's second-highest earning segment, services. The digital business includes income from the App Store and its various subscription services, with revenue increasing by 14% year over year.

But the recent rally was primarily thanks to news that Apple plans to buy back $110 billion in shares, the largest amount in its history. The figure beats last year's $90 billion buyback and will see its dividend increase by $0.01.

Apple still has a mountain to climb to regain consistent quarterly growth, but the buyback plan is a vote of confidence from management in the company's financial future.

The company remains a leader in consumer tech, achieving $102 billion in free cash flow in the second quarter despite recent headwinds. That figure indicates it has the funds to continue investing in its business and overcome current challenges.