Apple (AAPL) is the greatest stock of all time but this year’s parabolic move may be its last hurrah. That’s because while the stock is up more than 50%, it has nothing do with the company’s fundamentals. The essential problem is that AAPL is a mature company and no longer a growth stock. Investors reflexively pile into AAPL because it’s been a great stock for so long – but nothing lasts forever.
Few investors realize that AAPL has had negative revenue and net income growth in each of the last two quarters. In fact, net income has been negative 3 of the last 4 quarters – and it was up only 0.8% in the other. Its Services segment was providing much needed growth but that too has waned in recent quarters. Why are investors still paying more than 30x earnings for a stock with no growth? The most popular stock in the market has now become the most overvalued.
At some point investors will realize that the emperor has no clothes. Perhaps it will be when AAPL reports 2Q23 earnings Thursday afternoon.
Disclosure: Top Gun is short shares of Apple (AAPL).