Recession? It looks like Apple Inc. AAPL didn’t get the message.
While many other companies like Meta Platforms Inc. META have declined as much as 70%, Apple has hardly hit bear market territory from its all-time highs.
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In contrast, even powerhouses like Google parent Alphabet Inc. GOOGL, and Amazon.com Inc. AMZN have since declined considerably and are trending down. Google, for example, has dropped approximately 37%, and Amazon has declined even further to plunge as much as 50%. Combined, Apple is now worth more than some of the largest companies on the planet. This includes being worth more than Google, Amazon, Tesla Inc. TSLA, and Walmart Inc. WMT combined.
So, what is Apple doing differently? Apple isn’t putting up massive earnings numbers, but it’s hitting expectations or only posting minor misses. Google’s profits plummeted 27% in the third quarter, and Amazon had weak guidance and a year-over-year decline in net income.
But more important might be its massive share buyback program. Apple bought back almost $90 billion worth of its shares in fiscal 2022. Apple has spent over $550 billion in stock buybacks since the program began in fiscal 2013. This compares to Amazon’s $0 spent on buybacks and only about $15 billion for Google.
But maybe the tides are shifting. Google recently announced a share buyback program of nearly $70 billion for 2023 after seeing the success of Apple’s program. Meanwhile, some estimate Apple’s buybacks will slow as the dividends continue to increase, share buybacks become increasingly expensive, and profits potentially decrease because of the recession.
This might mean Apple’s winning streak is slowing, while Google could be a value play. But this theory doesn’t account for the drop in profitability and net income for those stocks.
The play might not be entirely public stocks, as increased volatility and lackluster returns might just be the stock market for the foreseeable future. One option is diversifying into startups. MaxTracker, for example, is a startup currently raising funds and looking to beef up the Apple AirTag. Rather than the inconsistent Bluetooth approach taken by Apple, MaxTracker is adding GPS capabilities, alarms and extended battery life to the mix.
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Now is the time to evaluate the market and look for value as investors weigh the potential for a rebound versus anticipation of further downside in the short term.
