Apple's strong services growth offset by weak iPhone sales and market sell-off

From Nasdaq: 2024-08-10 17:16:00

Apple delivered solid fiscal third-quarter results, but got caught in recent market sell-off due to tech-driven sell-off and small interest rate hike in Japan. Despite market correction, Apple’s revenue increased 5% to $85.8 billion, above analyst expectations. Services revenue saw 14% growth to $24.2 billion, leading the way. iPhone sales declined slightly, while iPad sales surged 24%. Mainland China remains a weak spot, with revenue down 6.5%. Looking ahead, Apple forecasts similar growth for Q4 and double-digit services revenue growth.

With consistent growth in services, Apple’s profits are on the rise. While iPhone sales are subdued, a significant upgrade like the recent iPad release could boost hardware sales, including iPhones. The company’s focus on AI development could further drive hardware sales. Despite a high valuation, investors should await a pullback in Apple shares before considering buying. Warren Buffett cut his large Apple stake in half, indicating the stock is overpriced.

The Motley Fool Stock Advisor team does not currently recommend Apple as one of the top 10 stocks for investors. Investors should consider other options that have the potential for significant returns over time. Apple stock currently trades at a forward P/E ratio just above 28, while historical P/E ratios indicate the stock is overvalued. Waiting for a pullback in stock price before investing may be a prudent approach.



Read more at Nasdaq: Apple Gets Caught Up in Market Sell-Off. Is It Time to Buy the Dip in the Stock?