As we enter the final week of 2024, Apple (NASDAQ:AAPL) has once again done well by its investors over the course of the past year. The technology stalwart has gained over 33% in 2024, outpacing even the white-hot Nasdaq-100 on which it sits.
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Apple was even within striking distance of becoming the first-ever $4 trillion company last week, before widescale losses throughout the market on Friday brought the company down a notch as well.
Still, as the bullish year comes to a close, it is fair to wonder if Apple’s gains of 2024 will continue in the year to come.
While not convinced that rapid growth is on the horizon, the investor known by the pseudonym JR Research–who sits in the top 1% of TipRanks’ stock pros–is urging investors to stay onboard the Apple express.
“I will encourage AAPL holders to sit tight, enjoy the ride, and buy aggressively on steep pullbacks,” notes the 5-star investor.
JR Research explains that Apple is not trying to achieve revolutionary growth through its iPhone sales, but is instead focused on the “seamless integration” of its hardware and software offerings. In the vein, the launch of Apple Intelligence was well-timed to coincide with the release of the iPhone 16, notes the investor.
JR Research continues that Apple’s desire to take advantage of the AI trends that have taken the tech world by storm have not driven the company to throw caution to the wind and spend with abandon.
“Apple’s careful infrastructure investments in AI provides more confidence to investors about managing highly expensive AI capex judiciously,” JR Research writes, and its “continued progress in custom AI chips could bolster its AI strategy against its peers.”
However, the rising share prices over the past year have placed Apple into fairly expensive territory, with a 27x Forward EBITDA multiple that is 70% more expensive than its tech sector peers. While not necessarily correlated, the expensive valuation could be one of the reasons that legendary investor Warren Buffet has reduced his exposure to Apple, notes JR Research.
And yet, the investor reminds readers that Apple remains Buffett’s largest public equity investment, making up over a quarter of Berkshire Hathaway’s portfolio. This certainly meshes with JR Research’s view of Apple’s staying power, and the investor “cannot comprehend why anyone in their right mind would even short or sell AAPL.”
JR Research is therefore maintaining a Hold rating, while planning on using any future dips to continue buying AAPL stock. (To watch JR Research’s track record, click here)
Wall Street also feels warm and fuzzy when it comes to AAPL stock. With 19 Buy, 8 Hold, and 2 Sell ratings, AAPL enjoys a consensus Moderate Buy rating. However, its 12-month price target of $245.28 would lead to minor losses in the coming year, suggesting that the Street does not expect the gains of 2024 to repeat themselves in 2025. (See AAPL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
