Investing

Here's Why Apple Stock Is a Buy Before January 30

Chris MacDonald

Published: January 28, 2025 10:11 am

Apple (NASDAQ:AAPL) remains a top mega-cap tech stock investors focus a disproportionate amount of time on, for the explicit fact that this company is the largest holding for many investors. Given Apple’s status as the most valuable company in the world, its weighting in many market cap-weighted funds is the highest. So, where Apple stock heads, so too do most portfolios (at least, Apple’s performance continues to be among the biggest drivers of returns, particularly in recent years).

But with a world-class ecosystem that’s driven so much growth in recent decades, investor expectations continue to remain high that despite Apple’s size, the company can continue to find a way to produce meaningful growth. With revenue stagnating on a relative basis over the past two years, some long-term bulls have begun to pare back their Apple holdings (Warren Buffett being among the most prominent such individuals).

However, there are other bulls who believe that Apple could see a return to growth in the quarters to come. With Apple set to report its fiscal Q1 results (which cover the holiday season) in just a few days, let’s dive into why this stock may be a buy ahead of this key print.

Key Points About This Article:

• Apple investors continue to focus intently on the company’s upcoming earnings report, which could signal where this stock is headed from here.
• Despite headwinds that have built in the market, Apple remains a stock that investors may want to hold into its upcoming earnings report.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Volatile Price Movements Of Late

Apple’s stock fell 4% following reports of an 18% drop in iPhone sales in China last quarter, and has fallen even more this week ahead of its upcoming earnings report as investors continue to remain in sell mode. News that Chinese AI startup DeepSeek has put together a large language model that has reportedly outperformed various U.S. rivals (at a fraction of the cost – around $6 million only) has sent shockwaves through the industry.

For companies like Apple that continue to invest heavily into their AI capabilities, this move is one that should be worrisome for investors. The company’s status as a top producer of both software and hardware does insulate the company from the selling pressure seen in other areas of the tech market this week (namely, chip stocks). However, there is growing concern that volatility could pick up this week as investors look at tech companies’ earnings with less-than-rose-colored glasses.

The reality is that Apple remains a pivotal player in the smartphone and computing market, with the top-selling brand int he U.S. and one of the best global brands as well. We’ll have to see if analysts are overly bearish on this stock (with various downgrades heading into the print over the past week), or if analysts are correct in calling for a correction down the line. But for now, it’s clear that plenty of pessimism is being baked into Apple’s stock price as well as its peers. Such a scenario could set up a buying opportunity for long-term investors, depending on their time horizon.

Strong Fundamentals Driven By Growth Potential

Again, taking the long-term view on Apple, this is a company that’s seen impressive growth for decades. This past quarter, the smartphone maker reported $94.9 billion in Q4 2024 revenue, a 6% year-over-year increase, with product sales climbing to $70 billion. Analysts project 6% growth in 2025, driven by a 21.5% EPS increase due to higher margins from its expanding services. The holiday season will be crucial for gauging Apple Intelligence’s early impact.

Moreover, Apple maintained a strong cash position, reporting $27 billion in operating cash flow last quarter and returning $29 billion to shareholders. It offers a $0.25 quarterly dividend with a 0.42% yield as of January 15. By Q3 2024, 158 hedge funds held $110 billion in Apple stakes, with Berkshire Hathaway owning 300 million shares.

I’ll be watching how the company’s margins and earnings per share metrics shape up this coming quarter, and will look for any sort of commentary around Capex projections for this year and next out of this report.

Apple Still Looks Like a Buy

Investors should consider buying Apple Inc. stock before January 30, 2025, primarily due to the upcoming Q1 earnings report, which could reveal significant growth potential. Analysts project a 13% revenue growth driven by Apple’s services segment, showcasing the strength of its high-margin recurring revenue streams despite challenges in iPhone sales. The recent decline in Apple stock does appear to be warranted, and there’s certainly the possibility that more selling pressure will take hold from here. However, it’s also likely that this dip could present a long-term buying opportunity, as market reactions to short-term fluctuations often lead to overreactions. 

Additionally, Apple’s management has a history of conservative guidance and exceeding expectations, which could bolster investor confidence ahead of the earnings announcement. With a robust balance sheet and expanding gross margins, Apple looks well-positioned to continue to provide sustainable growth, making it an attractive option for long-term investors looking to capitalize on potential recovery and upward momentum in the stock price