Latest news with #AAPL
Yahoo
8 hours ago
- Business
- Yahoo
Apple Stock: Did President Trump Just Give Investors a Reason to Sell?
President Trump wants iPhones assembled in the United States, which would be expensive for Apple. The company is grappling with potentially rising costs and lawsuits coming for its cash cows. Shares of Apple look expensive today when considering all these long-term risks. 10 stocks we like better than Apple › Apple (NASDAQ: AAPL) has optimized its costs through a global manufacturing footprint. This relationship -- specifically with China -- may be coming to an end if President Donald Trump gets his way. The maker of the iPhone used the large and cheap labor market of China and other Asian nations to cheaply build and assemble its hardware before selling to consumers around the world, making a tidy profit in the process. Now, with large tariffs implemented on imports from China, Apple has begun to move some of its manufacturing to India in order to hedge its bets. However, this caught the ire of Trump, who said that Apple will face a 25% tariff on iPhone imports and that the products should be made in the United States in order to reshore manufacturing. According to analysts, building iPhones in the United States will greatly raise Apple's operating costs. Does that give investors a reason to sell the stock? Due to higher labor costs, assembling iPhones in the United States would increase Apple's variable costs for its hardware products. Analysts estimate it would cost Apple tens of billions of dollars to switch manufacturing to the United States while raising the per-unit price from $40 to $200 or higher. It is possible that Apple could make up these costs by raising the retail price on iPhones, but that is asking a lot from consumers when flagship devices already cost around $1,000. Last quarter, Apple's product division generated just under $25 billion in gross profit, which is revenue minus manufacturing/assembly costs. If Apple is forced to pay high tariffs or manufacture its phones in the United States, these large gross profits may disappear, leading to less bottom-line income and free cash flow. On top of the higher costs in the United States, Apple's supply chain wouldn't be immune from tariffs, with parts of the iPhone imported from Asia and still subjected to high tariffs as of this writing. In actuality, around half of Apple's gross profit comes from its high-margin services segment, which will not be directly impacted by tariffs. This includes revenue from the App Store and distribution agreements from Google to be the default search engine on the Safari web browser. In fiscal year 2024, $71 billion of Apple's total gross profit of $181 billion came from services. These high-margin revenue streams are under attack from antitrust lawsuits. Apple is now forced to allow mobile applications to use alternative payment methods to sidestep its 30% fee on payment processing, which could lead some profits to disappear. Current lawsuits may bar Apple from accepting a huge $20 billion (or more) annual payment from Google for default search engine status, another potential profit hit coming down the line. Even before these threats from tariffs and antitrust lawsuits, Apple was not firing on all cylinders compared to the other "Magnificent Seven" stocks. Over the last three years, Apple has only grown its revenue by a cumulative 3%. Alphabet's is up 29%, Microsoft's is up 36%, and Nvidia's is up a staggering 339% over that same time frame. The company is simply not growing much anymore as it fails to deliver any new hardware device that comes close to the popularity of the iPhone. In artificial intelligence (AI), Apple may be falling well behind the competition. It has failed to release updated services for Siri while letting competitors like Alphabet post cutting-edge breakthroughs in text, video, and image generation for consumers. This is not showing up in the numbers today, but Apple is at major risk of failing to win in the next great technology paradigm, which will impact its bottom line eventually despite its wide brand moat today. Apple stock is down 17.8% this year. I believe the stock still looks overvalued for investors today. It trades at a price-to-earnings ratio (P/E) of 31, which is higher than the S&P 500 average and higher than Alphabet even though Alphabet is growing much faster. Low-growth stocks trading at a premium earnings multiple are dangerous to own, even if they have been strong performers in the past. Apple may see its earnings finally move in the wrong direction if tariffs, lawsuits, and failures to win in AI lead to deteriorating power in the global technology landscape. It wouldn't shock me if Apple's profits were lower in five years compared to today. For these reasons, Apple stock is an easy sell from your portfolio right now. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Apple Stock: Did President Trump Just Give Investors a Reason to Sell? was originally published by The Motley Fool
Globe and Mail
14 hours ago
- Business
- Globe and Mail
Amazon Wants to Create ‘Breakthrough' Products. Should You Buy AMZN Stock Here?
Over the past decade, consumer electronics divisions at major tech firms have driven growth, with hits like Apple's (AAPL) AirPods fueling shareholder gains while flops left others scrambling. Following in those footsteps, Amazon (AMZN) is stepping up its game by forming a new group called ZeroOne. The team's mission is to take ideas from 'zero to one' and launch entirely new product categories. ZeroOne is led by J Allard, the former Microsoft (MSFT) veteran who co-created the Xbox console. Job listings hint at projects ranging from smart-home computer vision to AI-powered wearables. This push comes after Amazon's mixed track record in devices. While the Kindle and Echo were major successes, products like the Fire Phone and Halo fitness tracker failed to gain traction. Recruiting Allard signals a bold bet on breakthrough innovation to reinvigorate the company's hardware ambitions. Amazon's top-line momentum is being fueled by its high-margin advertising arm, and the launch of ZeroOne offers potential new catalysts if it yields breakout products. About Amazon Stock Based in Seattle, Amazon is a global e-commerce leader, offering everything from everyday essentials to fresh groceries through its vast online marketplace and Prime subscription services. Its Amazon Web Services (AWS) division powers businesses worldwide with scalable cloud computing, storage, and AI tools. Beyond retail and cloud, Amazon generates high-margin revenue from its advertising platform and digital content, streaming video, music, and ebooks. The company is also expanding in logistics, robotics, and emerging technologies to drive efficiency and support future growth. Valued at approximately $2.2 trillion, Amazon shares have rallied 12% over the past 52 weeks, yet are down nearly 7% year-to-date amid fears over tariffs. Despite underperforming this year, Amazon shares still trade at a premium multiple of 33x forward earnings, significantly higher than the industry average of 16x. However, these multiples are well below its own historical average of 70x. AI-Powered Cloud Services Artificial intelligence is playing a key role in driving AWS's expansion. Amazon clients leverage tools like SageMaker to train and run models on Amazon's servers instead of purchasing costly hardware. As the global cloud computing market leaps from $750 billion in 2024 to nearly $2.9 trillion by 2030, AWS stands to capitalize on a projected 20% expansion driven by AI demand. Furthermore, AI is transforming Amazon's operations. The company deploys machine learning to optimize warehouse robotics, cut labor costs and speed order fulfillment. It enhances product recommendations, refines Alexa's voice responses, and improves demand forecasting. These AI applications boost efficiency, customer satisfaction and profitability across Amazon's vast e-commerce and services ecosystem. Amazon Delivered Strong Q1 Earnings Amazon's recent earnings beat, helped by temporarily easing tariff pressures, has lifted investor sentiment. On May 1, the e-commerce giant reported Q1 revenue of $155.7 billion, up 9% year-over-year and $546 million above guidance. Despite Online Stores being Amazon's largest segment, it grew just 5% to $57.4 billion and carries razor-thin margins. Nevertheless, companywide operating income jumped 20%, underscoring how its cloud and ad businesses are increasingly shouldering the profit load. Logistics efficiencies also played a key role. Shipping costs rose only 3% year-over-year against an 8% increase in paid units, a notable five-point gap compared to last year. Internal documents point to warehouse robotics flattening Amazon's hiring curve, further trimming labor expenses. Meanwhile, AWS once again led the way, posting 17% revenue growth on a $120 billion annual run rate and expanding operating margins to 39%. These results highlight AWS's role as the company's primary profit engine. On an adjusted basis, Amazon reported earnings of $1.59 per share, surpassing estimates by $0.24. Looking ahead, management sees up to 11% year-over-year revenue growth in Q2. While tariff jitters could temper top-line upside, the 11.8% operating margin achieved in Q1 suggests Amazon is well-positioned to exceed profitability expectations once again. What Do Analysts Think About Amazon Stock? Analysts remain bullish on Amazon after its Q1 earnings. Wedbush raised its price target from $225 to $235 early in May, citing 'multiple levers of sustainable margin improvement.' Similarly, JPMorgan boosted its price target from $220 to $225, noting that AWS is bringing on more capacity and that incremental supply is being consumed quickly. Overall, Amazon carries a consensus 'Strong Buy' rating from Wall Street analysts, with a mean price target of $240.69 implying 17% upside from current levels.
Globe and Mail
20 hours ago
- Business
- Globe and Mail
Will Apple Reclaim Its Title as the Largest Company in the World by Market Cap? The Answer May Surprise You.
For more than a decade, Apple (NASDAQ: AAPL) was the largest company in the world by market capitalization. And while it still has a market cap of $3 trillion as of this writing, it has been surpassed by Microsoft and Nvidia in the last few years as cloud computing and artificial intelligence (AI) computer chips take the market by storm. It was one of the longest reigns in market history, but Apple's status as top market cap leader has officially come to an end. Will it make a comeback and reclaim its No. 1 spot? In the next few years, at least, the answer is quite clear for investors. Slower growth than its peers In order to compare Apple with other trillion-dollar market cap peers, the first thing to do is look at growth. Microsoft has grown its revenue by 36% over the last three years. Nvidia has grown its revenue by over 300%. Apple? Its revenue is only up 3.3% in the last three years, not growing much at all and greatly trailing the rate of inflation. Fewer consumers are buying iPhones every year while new products like the Vision Pro flopped. It looks like this will continue over the next few years as well. Microsoft and Nvidia are benefiting immensely from AI and its impact on demand for cloud computing and semiconductor products, where both companies are leaders. Apple has failed to capture any share of these rapidly growing sectors, which is why these other "Magnificent Seven" stocks are charging ahead of it in market capitalization. If these trends hold, the other cloud and AI players such as Amazon and Alphabet may pass Apple and send the stock further down the market cap rankings list. Is the valuation cheaper? Growth is not the entire picture with a stock. investors also need to consider valuation and the current earnings multiples of Apple, Microsoft, and Nvidia. On the one hand, look at the trailing price-to-earnings (P/E) ratio and see that Apple's P/E of 31 is well below Microsoft's P/E of 35 and Nvidia's P/E of 46. This would make Apple stock cheaper in a vacuum and could help it regain some ground in the market cap race. However, in all likelihood, these two competitors deserve to trade at higher earnings multiples than Apple because of faster growth in earnings per share (EPS). Similar to revenue, both Microsoft and Nvidia have grown EPS at a much faster pace than Apple while Apple's EPS has barely budged in the last few years. Expect this to continue over the next five years. Apple may see its EPS fall over the next few years. Its high-margin services and software revenue is under attack from antitrust lawsuits. The App Store was ruled a monopoly and Apple is now forced to allow third-party payment processors on mobile applications. Its huge payment from Google for default search engine status is also at risk of getting nullified due to a current lawsuit against Google. Both of these developments may hurt Apple's earnings power over the next few years. AAPL EPS Diluted (TTM) data by YCharts Why Apple will not reclaim its status as the largest company in the world I think it is unlikely that Apple will reclaim its throne atop the market cap leaderboard. It has minimal growth avenues to drive revenue higher while a company like Nvidia is posting 69% year-over-year revenue growth in its latest quarterly results. This dichotomy means that when it comes to market cap, Apple will fall further behind Nvidia and Microsoft in the years to come. Apple is a risky stock to buy right now. It is growing slowly, trades at a premium P/E ratio, and has risks coming that could hurt its future profitability. Avoid buying this stock for the time being. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
2 days ago
- Business
- Globe and Mail
Best Stock to Buy Right Now: Apple vs. Chipotle
It might seem like a strange comparison to pit Apple (NASDAQ: AAPL) and Chipotle Mexican Grill (NYSE: CMG) against each other, but these are two companies that are very popular among investors. While both face certain headwinds from things like tariffs and a bit of consumer uncertainty, I'm going to throw a real zinger out there, and call Chipotle the better investment at this time. Here's why. Financial trends First and foremost, let's look at how these two stocks have been doing. Over the last five years, Chipotle has been a much more consistent performer in terms of top-line revenue growth, expanding by 14.5% annually over the last few years. In comparison, Apple's momentum has slid since 2021, with revenue growth in the low single digits, and even negative 2.8% in 2023. Looking to 2025, both companies started out fairly strongly. Chipotle had year-over-year revenue growth of 6.4% in the first quarter, with a 7.7% increase in earnings per share to $0.28 per diluted share. Apple, in comparison, posted a 5% increase in revenue in its second fiscal quarter, while earnings were up a strong 8% to $1.65. On a trailing basis, Chipotle is a bit more expensive than Apple, carrying a P/E ratio of 44.8 vs. Apple's price-to-earnings ratio of 31.2, but I believe my next point will explain why Chipotle is still the better buy. Different stages in life Apple is a mature tech giant. Its iPhone, iPad, and Mac product lines have already penetrated global markets extensively. Growth now hinges on incremental innovations, services, and accessories -- areas that, while profitable, are already highly saturated and competitive. Take, for example, how many streaming services there are today as opposed to even a few years ago. Initiatives like Apple TV+ have a lot of competition now. Based on the sheer size of the company, it's going to be harder to hit high growth rates. Chipotle, by contrast, is still in a robust growth phase. With fewer than 4,000 stores and plans to expand in North America rapidly, Chipotle isn't resting on its laurels. It also recently announced its intentions to begin opening stores in Mexico by early 2026. It has significant room for physical footprint growth with the addition of international markets, giving it an untapped global potential. World events Let's face it. Tariffs are on everyone's mind right now. With President Donald Trump recently threatening Apple with a 25% tariff if they don't move their business back to the U.S., this is a nervous moment to hold a lot of Apple stock. When you consider how incredibly important the iPhone is to Apple's bottom line, this really matters. Chipotle, on the other hand, is arguably a little bit more insulated from all of the drama of global tech cycles, tech tariffs, semiconductor shortages, and international regulatory pressure. Sure, some of its food supply routes might experience some headaches, but we're not seeing food targeted the way big tech is. One worry is that the company did say earlier in the year that it would eat the costs of higher prices, rather than carrying them over to the consumer. That puts a damper on overall potential, but Chipotle still expects positive comp restaurant sales for the year. Conclusion The way I view it is fairly straightforward. Food is always in demand. Expensive phone upgrades and laptops are not. That gives Chipotle an edge. Apple remains a technological powerhouse, but its days of rapid growth may be behind it. Chipotle, on the other hand, is still a nimble, scalable company with strong brand loyalty, accelerating growth, and untapped markets. Should you invest $1,000 in Chipotle Mexican Grill right now? Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 David Butler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Chipotle Mexican Grill. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
Yahoo
2 days ago
- Business
- Yahoo
Best Stock to Buy Right Now: Apple vs. Chipotle
Chipotle has had more consistent annual growth rates than Apple. Meanwhile, Apple is currently right in the crosshairs of more tariffs. The clearer path for future growth at Chipotle makes it more appealing. 10 stocks we like better than Chipotle Mexican Grill › It might seem like a strange comparison to pit Apple (NASDAQ: AAPL) and Chipotle Mexican Grill (NYSE: CMG) against each other, but these are two companies that are very popular among investors. While both face certain headwinds from things like tariffs and a bit of consumer uncertainty, I'm going to throw a real zinger out there, and call Chipotle the better investment at this time. Here's why. First and foremost, let's look at how these two stocks have been doing. Over the last five years, Chipotle has been a much more consistent performer in terms of top-line revenue growth, expanding by 14.5% annually over the last few years. In comparison, Apple's momentum has slid since 2021, with revenue growth in the low single digits, and even negative 2.8% in 2023. Looking to 2025, both companies started out fairly strongly. Chipotle had year-over-year revenue growth of 6.4% in the first quarter, with a 7.7% increase in earnings per share to $0.28 per diluted share. Apple, in comparison, posted a 5% increase in revenue in its second fiscal quarter, while earnings were up a strong 8% to $1.65. On a trailing basis, Chipotle is a bit more expensive than Apple, carrying a P/E ratio of 44.8 vs. Apple's price-to-earnings ratio of 31.2, but I believe my next point will explain why Chipotle is still the better buy. Apple is a mature tech giant. Its iPhone, iPad, and Mac product lines have already penetrated global markets extensively. Growth now hinges on incremental innovations, services, and accessories -- areas that, while profitable, are already highly saturated and competitive. Take, for example, how many streaming services there are today as opposed to even a few years ago. Initiatives like Apple TV+ have a lot of competition now. Based on the sheer size of the company, it's going to be harder to hit high growth rates. Chipotle, by contrast, is still in a robust growth phase. With fewer than 4,000 stores and plans to expand in North America rapidly, Chipotle isn't resting on its laurels. It also recently announced its intentions to begin opening stores in Mexico by early 2026. It has significant room for physical footprint growth with the addition of international markets, giving it an untapped global potential. Let's face it. Tariffs are on everyone's mind right now. With President Donald Trump recently threatening Apple with a 25% tariff if they don't move their business back to the U.S., this is a nervous moment to hold a lot of Apple stock. When you consider how incredibly important the iPhone is to Apple's bottom line, this really matters. Chipotle, on the other hand, is arguably a little bit more insulated from all of the drama of global tech cycles, tech tariffs, semiconductor shortages, and international regulatory pressure. Sure, some of its food supply routes might experience some headaches, but we're not seeing food targeted the way big tech is. One worry is that the company did say earlier in the year that it would eat the costs of higher prices, rather than carrying them over to the consumer. That puts a damper on overall potential, but Chipotle still expects positive comp restaurant sales for the year. The way I view it is fairly straightforward. Food is always in demand. Expensive phone upgrades and laptops are not. That gives Chipotle an edge. Apple remains a technological powerhouse, but its days of rapid growth may be behind it. Chipotle, on the other hand, is still a nimble, scalable company with strong brand loyalty, accelerating growth, and untapped markets. Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 David Butler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Chipotle Mexican Grill. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Best Stock to Buy Right Now: Apple vs. Chipotle was originally published by The Motley Fool
