Like many technology companies, apple (AAPL 2.11%) 2022 will be happy to look in the rearview mirror after a challenging year and a particularly ugly December, during which its stock price fell 12.4%. While the year-over-year decline was primarily driven by macroeconomic headwinds that affected the entire market, in December investors grew uneasy about the company’s reliance on China for production. A surge in Covid-19 cases in that country has pressured production at factories that make about 70% of all iPhones, a device that accounted for 52% of Apple’s revenue in fiscal 2022.
Apple’s stock showed some recovery in January after production returned to 90% capacity and the company has long-term plans to move production entirely out of China.
Despite recent roadblocks, Apple remains a reliable and resilient stock. Shares of the company are still down 24% year-to-date, making now an excellent time to invest with an exciting year ahead.
Here are three reasons to buy Apple stock in 2023.
1. Apple is showing strength in a challenging year
Rising inflation and interest rates triggered a sell-off in 2022 as many companies reported disappointing quarterly results. However, Apple seemed to fare better than many of its peers.
While Apple shares are down 24% since January 2022, this number is significantly lower the alphabetA stock decline of 35%, the amazon43% of it, and Netflix40% over the same period. Looking at the company’s free cash flow as of September 30, Apple once again won with its $111.4 billion compared to Alphabet’s $62.5 billion, Amazon’s negative $26.3 billion, and Netflix’s $717 million.
Moreover, in the third quarter of 2022, nearly unwavering demand for Apple’s products showed its strength while rivals’ PC shipments fell by 15%. However, Apple was the only competitor to grow at 40.2% in the quarter. Seen at the same time Microsoft The PC-centric segment reported a slight revenue decline, while Apple’s Mac segment grew 25% year over year to $11.5 billion.
2. Apple is entering a high-growth market
Various acquisitions and filed patents over the years have revealed that Apple plans to move into the virtual/augmented reality (AR/VR) market. More recently, numerous outlets have reported that the company will likely announce an AR/VR headset as early as spring in 2023.
According to Grand View Research, this move is a promising look at Apple’s future, as the $25.33 billion AR market is expected to see a compound annual growth rate (CAGR) of 40.9% through 2030. Meanwhile, the VR market will be valued at $21.8 billion in 2021 and will grow at a CAGR of 15% during the same period.
In the past, the tech star has proven particularly adept at entering new markets and has quickly taken its market share to a dominant position. Without Apple, technologies such as smartphones, tablets, smartwatches, and even Bluetooth headphones would likely experience significantly slower mainstream adoption.
Even as a company Meta platform And sony Already participating in the VR market with their respective headsets, Apple’s past performance in entering new markets proves that buying its stock could be an investment in a future industry leader.
3. Apple is moving away from Intel
This year, Apple will complete the transition away from that Intel Processors on its own custom-made Apple Silicon chips in its Mac lineup. First announced in June 2020, the new system on a chip (SoC) has been a lightning bolt for the company’s desktops and laptops, offering significantly more power and better battery life than its Intel computers.
In the second quarter of 2021, Apple’s CFO, Luca Maestri, said that “more than half” of its Mac and iPad sales in that quarter were to customers who had never owned one before as more powerful Macs attracted consumer interest. From Q2 2020, the quarter before Apple Silicon first announced, the company’s Mac revenue grew 116% from $5.3 billion in Q4 2022 to $11.5 billion.
Over the past few years, Apple has gradually migrated each of its computers to Apple Silicon chips, with devices such as the MacBook Pro, MacBook Air, Mac Mini, and 24-inch iMac already moving. However, customers are still expecting a beefier Mac Mini, a larger iMac and an Apple Silicon version of the Mac Pro. And there are also rumors that a 15-inch MacBook Air may be announced later this year.
Apple has already enjoyed significant revenue growth since the introduction of Apple Silicon, and completing the transition with the release of these final products in 2023 is a great reason to invest in the company this year.
Suzanne Frey, an executive at Alphabet, 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 board of directors of The Motley Fool. Randy Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta platform CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Danny Cook has no position in any of the stocks mentioned. The Motley Fool has positions on and recommends Alphabet, Amazon.com, Apple, Intel, Meta Platforms, Microsoft, and Netflix. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 calls on Intel and short March 2023 $130 calls on Apple. Motley Fool has a revealing policy.