AAPL Shares Trade Near All-Time High: Is it Too Late to Buy the Stock?

Apple AAPL shares closed at $233 on Monday, quite close to its all-time high of $234.55 that it achieved on July 16. Its shares have appreciated 21% year to date (YTD), outperforming the Zacks Computer-Micro Computers industry’s return of 19%.

AAPL shares’ outperformance can be attributed strong demand trend for the recently launched AI-powered iPhone 16 line-up of devices. It also introduced the Apple Watch Series 10, as well as AirPods 4 and AirPods Pro 2, on Sept. 9.

The devices feature Apple Intelligence, which the company unveiled at its annual developers’ event. It is an advanced personal intelligence system seamlessly integrated into iOS 18.1, iPadOS 18.1 and macOS Sequoia 15.1. 

Apple Intelligence will be available this month as part of iOS 18.1, iPadOS 18.1 and macOS Sequoia 15.1. Apple Intelligence is available for iPhone 16, iPhone 16 Plus, iPhone 16 Pro, iPhone 16 Pro Max, iPhone 15 Pro, iPhone 15 Pro Max, and iPad and Mac with M1 and later, with device and Siri language set to U.S. English.

AAPL Outperforms Industry YTD

AI Focus to Aid AAPL’s Prospects

Apple has been playing catch-up in the AI space with Alphabet GOOGL, Microsoft MSFT and Amazon AMZN, its peers in the “magnificent seven” group. Following the launch of Apple Intelligence, its competitive position is expected to improve.

Leveraging the power of GenAI models, Apple Intelligence aims to enhance user experience across iPhone, iPad and Mac by combining robust language and image understanding with personal context. This technology, powered by Apple silicon, promises to simplify and accelerate everyday tasks while maintaining Apple’s stringent privacy standards.

Apple Intelligence will be first available in U.S. English and will be expanded quickly to include localized English in Australia, Canada, New Zealand, South Africa and the U.K. in December. Additional language support — Chinese, French, Japanese and Spanish — will be available next year. 

Apple has integrated ChatGPT into its platforms, allowing users to access its expertise directly within iOS 18, iPadOS 18 and macOS Sequoia.

Siri, powered by Apple Intelligence, has become more natural, contextually aware and capable of handling complex tasks. Users can communicate with Siri using both voice and text, and the assistant can now maintain context across multiple requests. 

The new writing tool helps users rewrite, proofread and summarize text everywhere, including mail, notes, pages and third-party apps.

Services Business: Key Catalyst for AAPL Stock

Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s strong growth driver. In the fiscal third quarter, Services revenues grew 14.1% year over year to $24.21 billion and accounted for 28.2% of sales.

The Services business benefits from the growing demand for Apple TV+ content and the adoption of Apple Pay. It recently expanded Tap to Pay on iPhone to more markets, including Japan, Canada, Italy and Germany. 

New updates include the U.S. national park hikes and custom walk routes and Apple Maps, the ability to pay with rewards using Apple Pay, collaborative listening with Apple Music and a redesigned Apple Fitness+ to boost user experience.

Apple expects the September-end quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as the June-end quarter on a year-over-year basis. For the Services segment, Apple expects a double-digit growth rate, similar to the first three quarters of fiscal 2024.