3 Reasons to Buy Apple Stock Like There’s No Tomorrow

Apple might be one of the smartest buys in tech.

Apple (AAPL 0.53%) is a tech titan that needs no introduction. It’s one of the most iconic — and beloved — brands on the planet, and it was the first publicly traded stock to reach $1 trillion, $2 trillion, and $3 trillion in market capitalization.

However, Apple stock has lost a bit of its luster this year, with tariff fears and a federal antitrust lawsuit weighing on investor sentiment. As of July 3, the stock is down 14.5% in 2025, and it’s down 3% over the past 12 months.

Is this a good time to pick up Apple shares at a discount? Here are three reasons why that could be a strong move for your portfolio.

Apple iPhones.

Image source: Apple.

Apple is a cash machine

While Apple stock may have temporarily lost some of its shine, Apple the company is still printing money — and sitting on a mountain of cash. That’s the first reason to buy Apple like there’s no tomorrow.

In its fiscal 2025 second quarter, which ended March 29, Apple reported $95.4 billion in revenue, up 5% from the year-ago period. Diluted earnings per share (EPS) increased 8% to $1.65, a record high for Apple’s January through March quarter.

In Q2, Apple’s operating cash flow — the cash generated from its core business operations — was $24 billion. While that was about $3 billion less than what Nvidia generated in its fiscal 2026 first quarter, it’s still an enormous cash stream that gives Apple the flexibility to invest in R&D, make strategic acquisitions, and reward shareholders.

And rewarding shareholders is where Apple really shines. Since fiscal 2012, Apple has returned nearly $1 trillion to shareholders through stock buybacks and dividends — likely more than any company in history. In Q2 2025, Apple’s board rubber-stamped another $100 billion in stock buybacks.

While Apple might not be the flashiest tech player in a market that’s fixated on AI plays right now, it’s still a cash-generating powerhouse with a shareholder-friendly track record that’s unmatched by its peers.

Apple’s services business is booming

The second reason to pile into Apple stock is its services business, which includes Apple Pay, Apple TV+, iCloud, and Apple Fitness+. In Q2, revenue from services jumped 12% to $26.6 billion, a record high for the company. While that was less than half the revenue from iPhone sales, services is Apple’s most profitable segment, with a gross margin of nearly 76% in the second quarter — double the gross margin for hardware.

Apple now boasts more than 1 million paid subscriptions across its services — a staggering figure that points to the strength and stickiness of its ecosystem. This is predictable, high-margin revenue that can smooth out the ebbs and flows of hardware sales. But it also has the potential to play an increasingly larger role in Apple’s long-term growth, especially if Apple can successfully integrate generative AI into its services and create experiences that keep users even more deeply embedded in the Apple ecosystem.

The AI opportunity

I’d be remiss if I didn’t mention that Apple has been playing catch-up in the AI race, and that’s likely one reason the share price has been under pressure this year. The company launched Apple Intelligence — a new suite of generative AI features for iPhone, iPad, and Mac users — in October 2024 and unveiled new AI capabilities in June. But Apple’s plans to release a new AI-powered Siri with in-house technology by spring 2025 have been pushed back to 2026.

In a recent blog post, analysts Brian Baker and Gene Munster asserted that Apple’s best option might be to acquire Perplexity, an AI-powered answer engine that’s developing an agentic AI browser called Comet.

“Perplexity’s strengths in AI search could help Apple develop a real alternative to Google Search — especially useful with the FTC potentially threatening Apple’s current multibillion-dollar default search deal with Google,” the analysts wrote. “This could fast-track a seamless, AI-native search experience deeply tied into the OS across all Apple devices.”

Whatever route Apple takes, the company is approaching the AI challenge from a position of strength, in my opinion. With its rock-solid core business and massive cash stockpile, Apple can afford to take its time to get AI right — and make a strategic acquisition if necessary.

Apple is trading at a reasonable valuation

The third reason to buy Apple stock is its valuation, which stacks up favorably against other members of the Magnificent Seven.

AAPL PE Ratio (Forward) Chart

AAPL PE Ratio (Forward) data by YCharts

On a forward basis, Apple is trading at a price-to-earnings (P/E) ratio of 29.7, which is lower than that of Nvidia, Tesla, Microsoft, and Amazon and slightly higher than Meta Platforms at 28.1. That seems like a fair valuation for a company with unparalleled brand loyalty, prolific cash flow, and a growing ecosystem of high-margin services.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, 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. Josh Cable has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. 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.

Source link

Visited 1 times, 1 visit(s) today

Related Article

Copy of 0207 Europe heat map

Wildfires are ‘disaster waiting to happen’, farmers warn

Farmers have warned that wildfires are a “disaster waiting to happen” as a third heatwave looms. The Met Office has issued seven red “very high” UV alerts ahead of the third heatwave in four weeks. Temperatures are expected to climb into the low 30s again from Wednesday into next week, following the UK’s warmest spring

At least 1 dead as Chantal brings record-breaking flooding to North Carolina

At least 1 dead as Chantal brings record-breaking flooding to North Carolina

Crews in North Carolina are “overwhelmed” with water rescues and search efforts on Monday after Chantal, then a tropical storm, made landfall a day earlier, causing record-breaking flooding in the central part of the state and at least one death, officials said. While the storm has dissipated as of Monday morning, Chantal — the third

X screenshot Elon Musk @elonmusk

MAGA Spirals After Shock Trump Conclusion on Jeffrey Epstein

The Trump administration has severely deflated conspiracy theories surrounding the case of Jeffrey Epstein. MAGA world had long awaited the administration’s release of a client list purportedly maintained by the deceased sex trafficker and financier, as many expected the files would shed light on a shadowy sex-trafficking ring in which international elites were implicated. The

Yemeni members of the Houthis carry a sign of the hijacked Galaxy Leader at a rally supporting Palestinians in February 2024

Israel bombs British ship seized by Houthis

Israel has bombed a British-owned ship captured by the Yemen based-Houthis as part of a wave of air strikes against the Yemen-based terror group. The ship, Galaxy Leader, was hijacked in November 2023 by terrorists rappelling from a helicopter in a commando-style raid that caught the world’s attention. The cargo vessel, registered in the Bahamas,

Afghan refugees at the Islam Qala border crossing

Iran deports 300,000 Afghans over Israel spying fears

Iran has deported more than 300,000 Afghan migrants over the last two weeks, Afghan authorities said. The exodus has been sparked by a national security drive in Tehran, which fears Afghans could be spying for Israel. Refugees described arbitrary arrests, detentions and widespread abuse by Iranian security forces, and said tensions spiralled after Israel’s strikes

Strategy Posts $14 Billion Unrealized Gain in Second Quarter

(Bloomberg) — Michael Saylor’s Strategy (MSTR) registered an unrealized gain of $14.05 billion in the second quarter due to a rebound in Bitcoin’s price and a recent accounting change. Most Read from Bloomberg The unrealized gain was partially offset by a related deferred tax expense of $4.04 billion, the company said in a US Securities

0
Would love your thoughts, please comment.x
()
x