Apple’s $1-trillion rally will be tough to beat in 2024

Apple added nearly US$1-trillion in market value this year. Such gains in 2024 will be harder to come by.

As it looks to arrest four consecutive quarters of declining revenue, the world’s most valuable publicly traded company faces uncertainty in China, where government agencies are cracking down on foreign-made devices. Competition from Huawei Technologies is intensifying, while Apple’s smartwatch business faces a potential US ban days before Christmas.

The stock’s 50% rally this year — driven by investor bets that the iPhone maker will continue to churn out big profits regardless of the health of the economy — has also left it in expensive territory. It’s priced at 29 times profits projected over the next year, nearly double its 10-year average valuation.

“The biggest risk for the business model of the megacaps right now is money rotating to other names,” said Eric Clark, a portfolio manager at Accuvest Global Advisors, who has trimmed his position in Apple and some other big tech stocks.

Clark notes such megacaps that face higher valuations, slower growth and tougher year-on-year comparisons may see investors divert funds to “other areas that I think might have more upside for 2024”.

Traders had been sticking to blue-chip tech stocks this year as the US Federal Reserve raised interest rates. Now, with signals that rates may have peaked as inflation cools, investors are developing an appetite for riskier stocks as the rally broadens.

With valuations stretched, any Apple advance would likely have to be fuelled by acceleration in profits. Wall Street is currently anticipating revenue growth of just 3.7% in fiscal 2024 and profit expansion of 7.6%, according to the average of analyst estimates.


The disconnect between the firm’s ascent to a market value above $3-trillion and its tepid growth outlook, helps explain why analyst enthusiasm has cooled.

Nearly unanimously bullish on big tech, Wall Street is more cautious when it comes to Apple. The stock has attracted only 34 buy-equivalent recommendations. That pales in comparison to’s 67, Meta Platforms’ 65 and Nvidia’s 59 bullish ratings.

However, not all are bearish. Wedbush Securities analyst Daniel Ives projects that the stock will be worth $4-trillion in market value by the end of next year. His Street-high price target of $250 towers over the $199 expected by analysts on average.

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“While there are lingering worries around iPhone shadow government bans in China, for now this issue is very containable and has not dented demand for Cupertino in this key region based on our recent checks,” Ives wrote in a note, referring to the California-based firm’s headquarters.

Even for Accuvest’s Clark, the challenges don’t diminish his view that Apple’s iPhone is “the greatest consumer staple that’s ever been created” and therefore a “higher multiple is warranted”.  — Subrat Patnaik, (c) 2023 Bloomberg LP

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