AAPL Stock Outlook: While Apple’s plans for AI are promising, expect a better entry point

Due to the inclusion of artificial intelligence elements in the iPhone, which is expected to become the next major revenue generator for the tech giant, Apple (NASDAQ:AAPL) the stock remains a consistent performer.

Apple is a fascinating investment due to its constant innovation, great financial success and measured market growth. Apple’s market share, technical innovation, and upcoming software and product releases put it in a position for steady growth in profitability.

Investors may want to buy Apple stock to take advantage of these encouraging changes and Apple’s future. Just make the right investments at the right time.

Apple has had a rough time of late, as the stock chart shows; shares are down 5% in the past month. As Apple shares have made lower highs and lower lows in recent weeks, it’s hard for investors to get interested before the $200 support level.

Additionally, Apple remains below 67% of the 1,601 firms in its peer group at a price-to-earnings ratio of about 32x. Indicating high value, the current P/E ratio is also substantially above the 10-year average of 18.2x and very close to the peak of 40.4x.

Finally, Apple, one of the Magnificent Seven companies, is a solid choice, but you have to wait for a better and more attractive entry position. Additionally, if you are in a significant position, follow through Berkshire Hathawayof (NYSE:BRK-ANYSE:BRK-B) strategy and part with part of it.

Product launches and exciting innovations

Apple’s upcoming iPhones include artificial intelligence elements aimed at boosting sales. During its developer conference in June, Apple introduced many artificial intelligence products and services under the name Apple Intelligence. These AI capabilities will enable a strong cycle of iPhone 16 upgrades. AI features improve camera performance, security and user customization.

Apple’s third-quarter sales fell 0.9%, missing forecasts for a 2.2% drop. Luca Maestri, CFO, said the iPhone 15 series exceeded expectations. Apple’s estimated fiscal fourth-quarter revenue rose 4.9%, the same as the previous quarter.

Analysts predict that the integration of artificial intelligence will propel significant advances with the next iPhone improvements. Oppenheimer set a $250 price target on Apple, anticipating artificial intelligence to increase hardware synergies.

In addition to artificial intelligence, the iPhone 16 Pro and Pro Max will include 5x optical zoom, ultra-wide performance, a hardware camera button and 6.3-inch and 6.9-inch screens.

Two AirPods 4 models will have new designs and USB-C charging. Premium models block noise. AirPops Max 2 has USB-C, Adaptive Audio and Conversation Awareness.

The Apple Watch Series 10 will have sensors for sleep apnea and high blood pressure and larger screens. Given Ultra 3’s increased powers, space black titanium would be fitting.

Additional capabilities abound in iOS 18, iPadOS 18, macOS Sequoia, watchOS 11, and tvOS 18. New Apple Music and iCloud Mail tools, improved Apple Pay, and revised Apple Fitness+ are among other Apple upgrades.

Financial performance and market expansion

Apple is showing strong financial health with its quarterly revenue of $89.5 billion. Estimated to be around $388.3 billion, analysts forecast the company’s revenue in 2024 with an estimated EPS of $6.55. These numbers show Apple’s consistent financial position and room for expansion.

Apple is expanding into developing countries such as Chile, Indonesia, Saudi Arabia and India. Although China presents some difficulties, the firm has seen a clear recovery in revenue, encouraging further expansion.

Apple now makes up to $14 billion worth of iPhones annually in India, increasing its iPhone production there. Part of Apple’s approach to reduce reliance on China and maximize India’s manufacturing capacity is to produce premium iPhone Pro models there for the first time.

Apple can manufacture and sell its goods cheaply in India because the government has reduced import duties on iPhones and components. Apple’s profitability in the area is expected to increase as this cut saves between $35 and $50 million annually.

Apple’s sales in India rose to more than $8 billion, reflecting a 33 percent increase over last year. High-priced iPhones were a major factor in this growth, highlighting the growing purchasing power of Indian consumers.

Wait for Apple Stock to Cool

Apple’s addition of artificial intelligence components to the iPhone will likely drive the next notable sales boost. Apple stock is therefore one of the best options to include in any portfolio, but price remains an issue.

In the first quarter of 2024, Berkshire Hathaway sold 13% of Apple shares. Buffett said the deal was partly done in anticipation of higher fees. Still, the choice probably also involved careful portfolio rebalancing and profit-taking.

That’s the kind of move smart investors should make: flip their gains into underpriced stocks and reinvest later. Wait for the post-earnings glow to wear off if you want to add to your Apple stock portfolio.

At the time of publication, Faizan Farooque did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publishing Guide.

At the time of publication, the Editor-in-Chief held a LONG position in AAPL.