Apple despite soaring high: Is the tech giant still worth an investment?

Apple has released its latest quarterly report and has once again delivered solid figures. In the third quarter of the 2024 fiscal year, which ended on June 29, the tech giant increased its revenue by 5% to $85.8 billion, surpassing analysts' estimates by $1.4 billion. Earnings per share rose by 11% to $1.40, exceeding consensus expectations by $0.06. This stability does not come out of nowhere: In the first nine months of fiscal year 2024, Apple generated 52% of its revenue from iPhone sales and 24% from services such as the App Store, iCloud, or subscription-based platforms like Apple Music and Apple TV+. The remaining 24% was from Macs, iPads, and Wearables, Home, and Accessories. Apple faces challenges. Following the boom during the pandemic, demand for new desktops, notebooks, and tablets has declined in a tough economic environment. iPhone sales also suffered from the end of the 5G upgrade cycle and intense competition in China. Nevertheless, there are positive developments: Services are growing and fostering customer retention within the Apple ecosystem; they already recorded over one billion subscribers. The launch of the AI-oriented iPhone 16 and expansion into India could further drive business. Particularly exciting is the recovery in the iPad segment, which recorded growth after five quarters of declining sales. However, Apple remains under pressure in China, where revenue fell by 10% and market share shrank from 16% to 14%. Financially, Apple is in excellent shape: At the end of the quarter, the company had $153 billion in cash and marketable securities, providing room for investments and acquisitions. Regulatory challenges, including a lawsuit from the US Department of Justice and investigations in the EU, could, however, impede the growth of the services sector. Meanwhile, Apple continues to reward its shareholders with share buybacks and dividend payments. In the first nine months of the current fiscal year, the company bought back shares worth $69.9 billion and paid out $11.4 billion in dividends. Analysts forecast revenue and profit growth of 8% and 16%, respectively, for the 2024 fiscal year. Growth rates of 8% and 11% are expected for 2025. Despite these steady growth rates, the stock remains highly valued at 30 times the forward earnings and is considered a safe haven in volatile markets. Therefore, Apple shares remain attractive to long-term investors, though substantial short-term gains are unlikely given the existing challenges.