Does Apple Stock Have ANY Upside in 2025?

Apple stock faces bearish sentiment due to Warren Buffett's selling, lack of AI products, and potential geopolitical headwinds. However, the speaker believes that a potential drop in price to around $200 could present a buying opportunity, given the company's strong chip production, buyback program, and potential for tax benefits under a Republican-controlled government in 2025.

Negative Headlines

• 00:00:40 Apple stock has faced negative headlines, including Warren Buffett's selling of Berkshire Hathaway's shares, the technology industry's rapid adoption of AI, which Apple hasn't fully integrated, and investor concerns over the potential impact of Donald Trump's policies on China, a key market for Apple. This has created uncertainty and may cause some investors to hesitate.

Valuation

• 00:03:30 Apple's valuation is currently higher than its 5-year average, suggesting it might be overvalued. Based on calculations using trailing and forward PE ratios, the stock price could potentially drop to around $200, which some investors might consider a more favorable entry point. The speaker believes a drop to this level would be within a reasonable range and could be a good time to consider buying Apple stock.

Chip Production

• 00:07:21 Apple's in-house chip production is a positive factor. By designing and developing its own chips, Apple has reduced costs, strengthened its intellectual property, and potentially positioned itself to leverage its chip technology in the AI space. This could lead to future innovative products and potentially even licensing agreements with other companies.

Stock Buybacks

• 00:09:11 Apple's stock buyback program has historically been a positive influence on the stock price. The company has consistently repurchased significant amounts of its stock, reducing the number of outstanding shares and potentially boosting the stock price. This strategy has been successful in the past and is likely to continue in the future, potentially mitigating the impact of any potential negative factors.

2025 Outlook

• 00:11:57 In 2025, a Republican-controlled government could potentially lead to a more favorable business environment and tax policies for Apple. This could potentially result in significant tax savings for the company. Coupled with a projected increase in Apple's services revenue and potential upgrade cycles, the speaker speculates that 2025 could be a good year for Apple, particularly if AI initiatives are successful and tax cuts are implemented.