As investors look across the biggest tech stocks in the world, they'll find some seriously battered and bruised names. Meta Platforms, Microsoft, Alphabet, Amazon, Apple (AAPL -2.19%), and Netflix, for instance, have all been hammered over the past 12 months. Their stocks are down anywhere from 23% (for Apple) to about 59% (Meta) during this time.

Given all of these companies' histories of strong execution, profitable growth, and leading positions in many of the markets they operate in, this set of beaten-down stocks is a great place to look for investment ideas.

But which one is potentially the best investment? I'd argue it's Apple -- and here's why.

Its product focus

What really differentiates Apple from some of its peers is its focused business model. The company makes its money from only a handful of product lines. Highlighting the intense focus of the tech company are Apple's business segments:

  • iPhone (about 52% of revenue)
  • Mac (10%)
  • iPad (7%)
  • Services (20%)
  • Wearables, home, and accessories; these largely consist of Apple TV devices, headphones, smartwatches, and smart speakers (about 10% of revenue).

With such a focused business, Apple is able to be very thoughtful about what new products it wants to add to its arsenal over the years. This has worked out well for the company historically, with the iPhone, iPad, Apple Watch, and AirPods all serving as great examples of new product lines that contributed substantially to Apple's growth.

Given how loyal the company's customer base is, it wouldn't be surprising to see another new product eventually come to market and provide another phase of significant growth for the company.

Monetizing users

Apple's services business, which now accounts for nearly 20% of overall revenue, is one of the most promising aspects of the business. Through sales of third-party apps and app subscriptions and native services like AppleCare, Apple Pay, Apple Music, Apple Fitness, and Apple TV+, the company is monetizing its growing base of active devices, which as of the last reported count was 1.8 billion.

This growing number of active devices represents an immense opportunity for the company to continually look for more ways to provide value and, ultimately, monetize its user base.

A good steward of capital

Lastly (and probably most important), Apple has proved to be an exceptional capital allocator. This is a crucial trait to look for when considering investing in profitable companies.

Without prudent capital allocation, companes might squander their cash. Instead of burning through cash in unprofitable and speculative business ventures or acquisitions, Apple pinches pennies when it comes to acquisitions, and it pays back cash to shareholders in a way that balances dividends and prudent (and even opportunistic) share repurchases.

Today, Apple investors get a 0.7% dividend yield, and they can take comfort in the fact that management has executed a monstrous share repurchase program over the years, buying back $550 billion worth of its stock at an average price of $47 (on a split-adjusted basis) since the inception of the buyback program in 2012.

Apple continues to repurchase shares regularly and plans to do so for the foreseeable future. Given the company's good execution on its share repurchase program to date, management will likely continue to exercise wisdom regarding when and how much to spend on its own shares.

Combining these factors with the stock's reasonable valuation of 22 times earnings, it's easy to see why this looks like a good time to invest in Apple stock.