Idea

Time to buy Apple stock due to these three reasons

Namkyu

07 May 2024 — 2 min read

bitcoin halving is the same as Apple's stock buyback

Apple recently announced the largest buyback of stock in US history which is $110 billion. In terms of the mechanism for supply and demand of stocks, it is similar to bitcoin halving. I do think Apple stocks have some similarities with Bitcoin. Buyback brings a reduced supply of Apple stock in the market, Along with this, EPS(earnings per share) and stock price of Apple will be increased. And also This is a signal of confidence in Apple's business management team.

Apple announced that they have worked on chips for data center

There is no doubt that Apple Silicon is the most outperforming ARM chips in the mobile device market. By leveraging this chip technology, Apple announced that they have worked on chips for AI data centers for several years. If then, Apple can be next Nvidia in the AI infrastructure market. This is the hugest momentum for Apple and it will be a game changer in the AI industry. Even for openAI, They currently don't make their in-house chips for their services. Only Apple builds in-house chips collaborated with TSMC 3nm lines and owns 2.2 billion mobile endpoint devices on top of the iOS software ecosystem. There is no other company like what Apple is doing.

Apple still sustains its wide moat

As you see in recent Apple reports, their revenue from service sectors such as Apple Music and Apple TV+ in the Apple business arm are increasing. This is the signal Apple's ecosystem is still robust enough to be growing over a longer period. Even though losing revenue sales of iPhone in China, Apple's business is steadily growing and defending against high inflation in the market. This means Apple still sustains its wide moat for its business. With that wide moat, their business will be robust over a longer period against other competitors in the consumer market.

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I don't recommend that you invest in Apple stock with the full amount of your cash in your portfolio. Rather than that, You need to monitor the yield of a 10-year maturity US treasury bond and decide whether you invest in big tech and AI-related stocks or not. I would say that DCA(dollar cost average) is a good way of investing in Apple stock for now.

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