Apple (AAPL 0.02%) shares have slid 4% since the start of August, with investors disappointed by revenue declines in several of its product segments during its fiscal 2023's third quarter (ended July 1). This represents the tech leader's third consecutive quarter of falling revenue as it fights macroeconomic headwinds.
Despite recent hurdles, Apple continues to have a solid long-term outlook. The company has a booming services business that enjoyed an 8% bump in revenue in the latest quarter, and it has leading market shares across its product lineup that will likely pay off once the sector bounces back.
Moreover, easing inflation and technological advances have paved the way for a correction from last year's sell-off, with many analysts calling for a bull market. Apple's stock is up 45% year to date thanks to the recovery. Here are two reasons to buy Apple stock now.
1. The countdown to the next iPhone
Like clockwork, Apple holds a product event every September, where it announces the next iPhone. And 2023 is no different. This year's event is called Wonderlust and will take place on Sept. 12.
According to MacRumors, the new generation of smartphones is expected to use a USB-C charging port rather than Lightning, reducing waste and allowing consumers to interchange chargers with other devices more easily. Meanwhile, the iPhone 15 will likely feature faster modem chips, upgraded cameras, and more.
Revenue in Apple's iPhone segment fell 2% in Q3 2023, which concerned stockholders as it regularly accounts for over 50% of the company's total revenue. However, the quarter saw no new smartphone releases, which likely exacerbated the declines.
Meanwhile, inflation has eased every month since reaching a high of 9% in June 2022. Improvements have led to revenue gains for markets such as e-commerce, with Amazon enjoying massive profit boosts this year. Consumer spending on tech has been slower to recover. However, Apple's dominance in the industry will likely offer significant gains over the long term as the market bounces back.
2. Massive potential over the long term
One of the biggest reasons to invest in Apple is its command of the consumer tech market, which will likely bolster its expansions into high-growth industries, such as artificial intelligence (AI) and virtual/augmented reality (VR/AR). Both sectors are projected to grow at compound annual rates of over 30% through 2030.
Apple has a reputation for entering new markets and quickly stealing market share from the competition. The company has done this in nearly all its product categories, taking existing technology and improving it with custom designs and advanced software. As a result, Apple's debut of its first VR/AR headset, the Vision Pro, this past June should strengthen its long-term prospects.
Companies like Sony and Meta are currently the biggest names in VR. However, the Vision Pro has seemingly made leaps in innovation, potentially making it easier to convince consumers to adopt the technology into their daily lives. The Vision Pro will launch at $3,499, pricing out many consumers. But if Apple uses its tried and true pricing strategy of bringing down the cost with future iterations of the device, the headset could be a massive win over the long term.
Moreover, Apple is slowly expanding its AI offerings. The tech giant has added several AI-enabled features to its product lineup this year. It has also reportedly developed a framework for building large language models, allowing it to create a program similar to ChatGPT that engineers call Apple GPT.
Apple's stock has risen 231% over the last five years, more than Microsoft, Amazon, or Alphabet. With its promising expansions into two lucrative markets, the company's stock looks like an attractive buy into a possible bull market.
