3 Reasons to Buy Apple Stock in 2023

Like many tech companies, Apple (AAPL 0.03%) will be happy to see 2022 in its rearview mirror after a challenging year and a particularly ugly December, during which its stock price fell 12.4%. While year-over-year declines were primarily fueled by macroeconomic headwinds that affected the whole market, December saw investors grow uneasy over the company's dependence on China for manufacturing. A spike in COVID-19 cases in that country strained production at the factory that produces about 70% of all iPhones, a device that made up 52% of Apple's revenue in fiscal 2022.

Apple stock showed some recovery in January after production returned to 90% capacity, and the company has long-term plans in place to move manufacturing out of China entirely.

Despite recent roadblocks, Apple remains a reliable and resilient stock. The company's shares are still down 24% year over year, making now an excellent time to invest with an exciting year ahead.

Here are three reasons to buy Apple stock in 2023.

1. Apple is showing strength in a challenging year

Rising inflation and interest rates in 2022 triggered a sell-off as numerous companies reported dismal quarterly results. However, Apple seemed to fare better than many of its peers.

While Apple shares tumbled 24% since January 2022, the figure is significantly lower than Alphabet's stock decline of 35%, Amazon's 43%, and Netflix's 40% in the same period. When looking at the companies' free cash flows as of Sept. 30, Apple won out again with its $111.4 billion against Alphabet's $62.5 billion, Amazon's negative $26.3 billion, and Netflix's $717 million.

Moreover, in the third quarter of 2022, almost unwavering demand for Apple's products showed its strength when rivals' PC shipments fell 15%. However, Apple had the only growth among its competitors in the quarter at 40.2%. The same period also saw Microsoft report a slight revenue decline in its PC-focused segment, while Apple's Mac segment grew 25% year over year to $11.5 billion.

2. Apple is entering a high-growth market

Various acquisitions and filed patents over the years have revealed that Apple is planning to move into the virtual/augmented reality (AR/VR) market. More recently, numerous outlets reported that the company will likely announce an AR/VR headset in 2023, as early as spring.

The move is a promising view into Apple's future, as the $25.33 billion AR market is expected to see a 40.9% compound annual growth rate (CAGR) through 2030, according to Grand View Research. Meanwhile, the VR market was worth $21.8 billion in 2021 and will grow at a CAGR of 15% in the same period.

In the past, the tech star has proven particularly skillful at entering new markets and quickly growing its market share to a position of dominance. Without Apple, technology such as smartphones, tablets, smartwatches, and even Bluetooth headphones would likely have experienced significantly slower mainstream adoption.

Even with companies like Meta Platforms and Sony already participating in the VR market with their respective headsets, Apple's past performance in entering new markets proves purchasing its stock could be an investment in the future leader of the industry.

3. Apple is moving away from Intel

This year, Apple will complete its transition away from Intel processors to its own custom-made Apple Silicon chips in its Mac lineup. First announced in June 2020, the new systems on a chip (SoC) have been a bolt of lightning for the company's desktops and laptops, providing significantly more power and better battery life than its Intel computers.

In the second quarter of 2021, Apple's CFO, Luca Maestri, said "more than half" of its Mac and iPad sales in that quarter were to customers who had never owned one before as the more powerful Macs attracted consumer interest. Since Q2 2020, the quarter before Apple Silicon was first announced, the company's Mac revenue increased 116% from $5.3 billion to $11.5 billion in Q4 2022.

Over the past few years, Apple has slowly moved each of its computers to Apple Silicon chips, with devices such as the MacBook Pro, MacBook Air, Mac Mini, and 24-inch iMac already making the move. However, consumers are still anticipating Apple Silicon versions of a beefier Mac Mini, a larger iMac, and a Mac Pro. And rumors have also swirled that a 15-inch MacBook Air could be announced later this year.

Apple has already enjoyed significant revenue boosts from the introduction of Apple Silicon, and completing the transition in 2023 with the release of these final products is an excellent reason to invest in the company this year.