Is It Too Late to Buy Apple Stock?

Apple (NASDAQ: AAPL) investors haven't had it easy over the last year as the company faced repeated hits to its business. The company's stock has risen 17% over the last 12 months, significantly less than the 48% it increased in the calendar year of 2023.

Macroeconomic headwinds curbed consumer spending, leading to reductions in product sales. Meanwhile, critics questioned Apple's role in artificial intelligence (AI), as many of its rivals seemingly pulled ahead. However, recent developments indicate a recovery is underway.

Shares in Apple have popped 11% since June 10, when the company hosted its Worldwide Developer Conference. The tech giant debuted its new Apple Intelligence AI platform, unveiling new generative features for iPhones, Macs, and iPads.

Apple's long-awaited AI initiative has made Wall Street bullish and saw the iPhone maker briefly retake its spot as the world's most valuable company on June 12, hitting a market cap of $3.26 trillion. As a result, Apple is now neck and neck with Microsoft's $3.27 trillion market cap.

So here's why it's not too late to invest in Apple, with its stock a screaming buy this June.

Apple is boosting its business with AI

Apple hosted what was possibly its biggest Worldwide Developer Conference ever on June 10, unveiling a host of new AI capabilities through Apple Intelligence. The platform can generate language and original images, smartly prioritize notifications, and analyze personal data to answer specific commands like, "Play the song Steve messaged me" or "Show me the picture of Claire in the red dress at the beach."

Apple Intelligence will introduce AI writing tools that can rewrite and edit text in messages, notes, or essays. The company also revealed a major upgrade to its smart assistant, Siri, making it more personalized, natural, and contextually relevant. One of the most significant updates to Siri will be its ability to tap into OpenAI's ChatGPT for specific questions, representing the start of a new partnership between the companies.

Moreover, Apple strategically made Apple Intelligence available only to select devices, including Apple silicon Macs and iPads running M1 through M4 chips and iPhone 15 Pro models. The move could attract a rush of consumers looking to upgrade their products so they can access the company's new AI features.

Product sales have been a sore point for Apple this year, with quarterly revenue declining in each of its three product segments since the start of 2024 (as seen in the chart above). However, an AI expansion could be just the motivation consumers need to try out Apple's latest products.

One of the best-valued stocks in AI

The AI market has exploded over the last 12 months. Excitement over the generative technology has been a major growth driver in the Nasdaq Composite's rise of 31% since last June. Dozens of tech companies' stocks have soared, making it increasingly expensive for new investors to back the budding AI market.

Companies like Amazon, Microsoft, and Nvidia have enjoyed stellar gains thanks to AI. Meanwhile, Apple's more reserved approach to the industry has seen its stock trickle up at a slower rate. However, Apple's more gradual approach to AI could be why now is the best time to invest.

The company's stock is a better value than many of its rivals. Meanwhile, recent developments suggest Apple is only just getting started in AI, a market with plenty of room left to run and projected to expand at a compound annual growth rate of 37% through 2030.

This chart uses the forward price-to-earnings ratio and price-to-free-cash-flow ratio to compare the stock valuations of some of the most prominent companies in AI. Apple's shares are the best value on both fronts, with the lowest figures for both metrics.

Moreover, Apple's free cash flow of $102 billion is significantly higher than that of Amazon, Microsoft, or Nvidia, indicating the iPhone company could be best equipped to overcome potential headwinds and keep expanding in AI.

And that means now is an excellent time to buy.

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 Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $794,196!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

*Stock Advisor returns as of June 10, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.