Apple (AAPL 0.09%) has made a lot of millionaires over the years, with its shares up 792% over the last decade. However, it hit some roadblocks in 2024, with its stock down 11% year to date.
Macroeconomic headwinds caught up with the company last year, leading to four consecutive quarters of revenue declines. Its first quarter of 2024 finally broke the streak, with the tech giant posting revenue growth of 2% year over year to $120 billion as it beat Wall Street forecasts by more than $1 billion.
However, outperforming estimates hasn't been enough to quell investor concerns about other areas of Apple's business. In the first quarter of 2024, the company's iPhone division reported a 6% rise in total sales yet they fell 13% in China. The East Asian country increasingly prefers domestic brands over the iPhone, threatening business from Apple's third-largest market.
Then, on March 4, Apple's stock dipped again after news broke that the European Commission had hit the company with a $2 billion antitrust fine over concerns for its music streaming service.
Despite recent headwinds, Apple remains a leader in tech with dominating brand power and immense financial resources. The question remains: Is Apple still a millionaire maker, and could it make you one by the time you retire?
Apple has the brand power and funds to overcome current headwinds
It's hard to deny Apple's powerful position in tech. The company has leading market shares in most of its product categories, from smartphones to tablets, smartwatches, and headphones. In fact, the company holds the third-largest market share in e-commerce in the U.S., only after Amazon and Walmart, despite having a significantly smaller range of products.
Data by YCharts.
The popularity of Apple's offerings has instilled reliability in its business and given it the funds to overcome unexpected headwinds. This chart shows that Apple's free cash flow is considerably higher than some of the top names in tech. Apple's free cash flow actually increased 10% in 2023 despite hits to its revenue, allowing it to continue investing in its business.
While declining sales in China are concerning for now, growth in other regions could offset losses over the long term while the company gradually reshapes its business to rely less on the iPhone. In Q1 2024, product sales in Europe, Apple's second-largest market, posted revenue growth of 10% year over year. Meanwhile, sales in Japan soared 15%.
NASDAQ: AAPL
Key Data Points
Moreover, the recent launch of Apple's first virtual/augmented reality (VR/AR) headset, the Vision Pro, could become a key growth catalyst in the coming years. The VR market on its own is projected to expand at a compound annual growth rate of 31% until at least 2030.
Apple may be new to the industry, but it has a reputation for entering new sectors and quickly rising to dominance. As a result, an investment in Apple today could be an investment in the future leader of the $20 billion VR market.
Can Apple help you retire a millionaire?
Apple is on a promising growth path and has a long history of reliability. Its dominant role in tech and investments in budding industries like VR/AR and artificial intelligence (AI) will likely fuel its stock price for years.
Data by YCharts.
This chart shows Apple's earnings could hit nearly $8 per share by fiscal 2026. Multiplying this figure by the company's forward price-to-earnings ratio of 26 yields a share price of $208, projecting stock growth of 23% over the next two fiscal years. These projections would likely see Apple continue to outperform the S&P 500, which has increased by 13% over the last two years.
As a result, Apple's stock remains an attractive addition to a diversified portfolio. Its significant cash reserves and potent brand make it an excellent option to hold over many years, as one does when preparing for retirement. I wouldn't bet against Apple's reliability and tendency to deliver major gains over the long term.
If you're less than five years from retirement, there are likely better options than Apple as it will need time to overcome recent headwinds. However, if you're an early stage investor with 20 or more years to go, the right investment can help make you a millionaire by the time you retire, and Apple stock could play a useful part in helping you achieve that goal.
