Apple stock is down following reports of soft preorders for its iPhone 16 smartphones. Still, investors might be wondering: Is AAPL stock a buy right now?
The consumer electronics giant unveiled its iPhone 16 smartphone lineup, as well as new models of the Apple Watch and AirPods, on Sept. 9. The launch event, titled "It's Glowtime," was a largely surprise-free affair because most of the hardware news had leaked out weeks earlier. Apple stock rose a fraction for the day.
The star of the event was the iPhone 16 lineup, which comes with Apple's take on artificial intelligence, branded Apple Intelligence. Apple AI will use both on-device and data-center processing with a focus on privacy and security.
The centerpiece of Apple's AI strategy is a revamped Siri digital assistant, which responds to voice and text prompts. With AI smarts, Siri will be able to work across apps and retrieve information from messages, emails, calendar, photos and other apps. It also can summarize emails and webpages and transcribe calls. Plus, it can generate custom emoji and other images.
The iPhone 16 also has an AI application called Visual Intelligence. The tool lets you use your camera to instantly learn about anything you see, be it a plant, animal, business or other object.
Slow Rollout For Apple Intelligence
Apple stock analysts said iPhone 16 sales could be muted by the staggered rollout of Apple Intelligence features.
Apple's iPhone 16 smartphones will be available on Sept. 20 but Apple Intelligence won't be available until sometime in October. And even then, the AI features will be limited and in "beta" or test mode.
Wall Street analysts described Apple Intelligence as "not quite ready for prime time" and "not a fully baked offering."
On Sept. 13, Apple began taking preorders for the new smartphones. Several analysts reported that first-weekend sales were lower than expected, especially for Pro models.
Apple Stock Headwinds
Apple shares have been battered recently by several other news stories.
On Sept. 10, the European Court of Justice, the European Union's highest court, upheld an order for Ireland to recoup up to 13 billion euros, equivalent to $14.35 billion, plus interest, in taxes from Apple. The European Commission, the EU's executive arm, argued that Ireland had granted Apple benefits in contravention of EU state-aid rules, allowing the tech giant to pay substantially less tax than it owed.
On Aug. 5, a federal judge ruled that Alphabet unit Google violated antitrust laws by engaging in unfair business tactics to dominate the internet search advertising market. A central part of the Justice Department's case against Google was the company's $20 billion in annual payments to Apple to make Google the default search engine on iPhones.
Those payments to Apple are now threatened as the case moves to a remedy phase.
On Aug. 3, Warren Buffett's Berkshire Hathaway disclosed a massive sale of its Apple stake. Berkshire Hathaway cut its stake in Apple by 49% in the second quarter. Apple remains a top holding though, with the conglomerate owning $84.2 billion worth of Apple stock as of June 30.
Apple Fundamentals
Late on Aug. 1, Apple beat expectations for its fiscal third quarter thanks to record services revenue and strong iPad sales. It also guided modestly above views for sales in the current quarter. In the next trading session, Apple stock climbed 0.7% to close at 219.86.
Apple earned $1.40 a share on sales of $85.8 billion in the quarter ended June 29. Analysts polled by FactSet had expected Apple earnings of $1.34 a share on sales of $84.4 billion. On a year-over-year basis, Apple earnings rose 11% while sales climbed 5%.
In the June quarter, Apple's hardware sales rose 2% year over year to $61.6 billion while services revenue increased 14% to $24.2 billion.
Apple's iPhone revenue dipped nearly 1% to $39.3 billion and accounted for 46% of the company's total sales in fiscal Q3.
Meanwhile, Apple's iPad tablet sales jumped 24% to $7.2 billion thanks to the release of new models. Mac computer sales rose 2% to $7 billion.
Finally, revenue from Apple's wearables, home and accessories unit fell 2% to $8.1 billion.
Apple forecast fiscal Q4 revenue growth of about 5%, vs. the consensus estimate of 4.4%.
AAPL Stock Technical Analysis
Apple stock has an IBD Composite Rating of 82 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
AAPL stock has an IBD Relative Strength Rating of 70 out of 99. The Relative Strength Rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks.
Is Apple Stock A Buy Right Now?
No, Apple stock is not a buy right now.
Apple shares are in a 10-week consolidation pattern with a buy point of 237.23, according to IBD MarketSurge charts. That buy point is also Apple's all-time high, which it reached on July 15.
In addition, IBD analysis indicates an early entry at 232.92 from a V-shaped cup-with-handle base.
However, in a negative sign, Apple has fallen below its 50-day moving average line, a key support level. That is one of several bearish signs for Apple stock.
Apple stock ended regular session trading on Sept. 17 at 216.79.
Keep an eye on the overall stock market. If the market turns south, don't try to fight the general stock market direction.
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