BREAKING NEWS: Apple has officially become the first company in history to hit a $3.5 trillion market cap. 

(Source: Quartz) 

If you're wondering what that looks like, here’s some perspective that will legit blow your mind this Wednesday morning: A million seconds spans about 12 days, a billion seconds is a bit under 32 years, and a trillion seconds? Well that ends up being more than all of recorded history (a bit under 32,000 years)... and Apple has 3.5x the market cap. Unreal…

(Source: Giphy) 

But while we all pick our mouths off the floor after that jaw dropping math comparison, it’s not all popping champagne and toasting Tim Cook this Wednesday. 

Because today, in this issue, we’ll be diving deep into what this actually means for the tech giant, including all the good, the bad, and the downright ugly betty. 

(Source: Giphy) 

Let’s get to it! 

The Good: Apple Intelligence and Skyrocketing Stock

It’s no secret Apple has been on a tear lately, and a big part of that is thanks to its new brainchild: Apple Intelligence. 

(Source: Tech Crunch) 

Unveiled at their Worldwide Developers Conference last month, Apple Intelligence is their foray into the world of artificial intelligence, and it’s already making waves bigger than me in my son's kiddie pool.  

Not actually me btw…(Source: Giphy) 

Partnering up with OpenAI to integrate ChatGPT into the next iPhone, iPad, and Mac systems? Genius move. Siri has officially received the Captain America upgrade. 

(Source: Marketing Dive) 

So as expected when any company in 2024 mentions a love affair with AI, Apple's stock has been climbing nonstop. They closed at an all-time high of $228.68, translating to a market cap of $3.5 trillion. 

(Source: Google Finance) 

This obviously has analysts buzzing that Apple, along with Nvidia and Microsoft, could hit $4 trillion soon. But who will get there first? That’s the big question…

Because even though Apple has all the tools in its arsenal to get there, some believe that Apple is not only due for a pull back, but that gains have fatigued. 

(Source: Giphy) 

The Bad: Overpriced and Overhyped?

For instance, Piper Sandler analyst Matt Farrell, has been throwing some shade since the $3.5 trillion milestone. He bumped his price target up to $225 from $190 but kept a Neutral rating. 

(Source: Barrons) 

Details please…

Well according to Farrell, Apple’s current valuation is approaching its peak, and with consumer spending potentially slowing down, all this good news might already be baked into the stock price. Translation: Apple might be the beautiful prom queen today, but throw her in the pool and the real face (financials)… may not be so pretty after all. 

(Source: Giphy) 

Which brings us to Apple's ugly side. The side most Apple enthusiasts and Steve Job suck ups don’t want to acknowledge. 

The Ugly: Consumer Spending and iPhone Sales

You see, here’s where things get a bit dicey. While Apple's stock has been riding high, there’s a storm cloud on the horizon. Analysts have noted that cautious consumer spending could put a dent in iPhone 16 sales this fall. 

(Source: Luxury Playbook) 

Given that iPhones are basically Apple's golden goose, any hint of a slowdown could cause investors to break out in a cold sweat. Moreover, despite all the good vibes from Apple Intelligence, there’s a growing risk that Apple's valuation might be a bit too frothy as well. 

(Source: Giphy) 

With a P/E ratio around 32 times the consensus estimate for earnings per share over the next 12 months, Apple’s stock is nearing a 15-year peak. If consumer spending pulls a vanishing act, things could get ugly fast. 

So taking all of the good, the bad, and the ugly for Apple, what should we as investors expect going into this morning's session? 

(Source: Giphy) 

The Future Outlook: A Bumpy Road Ahead?

Well, to be honest, it’s a mixed bag, friends. 

On the one hand, Apple Intelligence could be a game-changer, potentially driving significant upgrades and boosting sales, especially in markets like China where iPhone shipments are expected to recover. 

(Source: CS Monitor) 

On the other hand, there’s the looming threat of economic slowdowns and the ever-present rivalry with Microsoft. Which is why Apple’s performance in the upcoming earnings report, scheduled for August 1, 2024, will be closely watched. 

(Source: Giphy) 

Our friends over at Zacks have a Consensus Estimate  that predicts earnings of $1.33 per share with net sales of $83.75 billion, up 2.38% from the year-ago period. Meaning, if Apple hits these numbers, it could reinforce the bullish sentiment. 

But any miss could have investors pulling out way too soon. Especially the ones who can’t hold their emotions longer than the golden three-minute milestone…

(Source: Giphy) 

So what to do, what to do with this information? Hmmm…

As it stands, Apple’s journey to a $3.5 trillion market cap is nothing short of legendary. 

They’ve faced down rivals, pivoted to new technologies with Artificial Intelligence, and kept Steve Job’s innovation mantra at the core of their strategy. So regardless of how the stock continues to perform in the short term, one would be unwise to believe the long-term doesn’t still look strong. 

(Source: Giphy) 

Apple has forever changed the tech landscape, and while the stock isn’t the get rich-quick AI small cap every 25 year old is looking for… this blue chip is still a crucial cornerstone stock for any savvy investor's portfolio. So with that said, is Apple a buy when it comes to your investments? 

Only you can answer that question. But I’ve laid it all out there for ya, bare butt at all. Hope this helps friends. Until next time… 

(Source: X) 

Stocks.News holds positions in Apple and Microsoft as mentioned in the article.