2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) has played a key role in creating revolutionary devices and services that have transformed the consumer electronics market, including the iPhone, iPad, iTunes, and the App Store, among others. The stock has surged by nearly 19% since the start of 2024 and in the past 12 months, it has delivered a 24% return. The company is delivering strong returns this year, even with some fluctuations in iPhone sales. In fiscal Q3 2024, it reported a 14.5% quarter-over-quarter decrease in iPhone sales, totaling over $39.2 billion.
Apple Inc. (NASDAQ:AAPL)’s overall revenue for the quarter came in at $85.8 billion, which grew by 5% from the same period last year. During the quarter, the company also unveiled significant updates to its software platforms at the Worldwide Developers Conference. This included Apple Intelligence, a groundbreaking personal intelligence system that integrates advanced, private generative AI models into the core of the iPhone, iPad, and Mac. Baron Funds highlighted the strengths in the company’s business in its Q2 2024 investor letter. Here is what the firm has to say about AAPL:
“This quarter we re-initiated a position in Apple Inc. (NASDAQ:AAPL), a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago. The increasing services mix has led to healthy operating margin improvement, providing more free cash flow for Apple to reinvest in the business and to distribute to shareholders. Throughout its 48-year history, Apple has successfully navigated and capitalized on major technological shifts, from PCs to mobile to cloud computing. We believe the company’s leading brand and device ecosystem position it to do equally well in the AI age, and this was the driver of our decision to re-invest. “Apple Intelligence” – the AI strategy unveiled at Apple’s recent Worldwide Developer Conference – leverages on[1]device AI and integrations with tools like ChatGPT to enhance user experiences across its ecosystem. The AI suite enables users to create new images, summarize and generate text, and use Siri to perform actions across their mobile applications, all while maintaining user privacy and security. We think Apple Intelligence can drive accelerated product upgrade cycles and higher demand for Apple services. The combination of growth re-acceleration, increasing services contribution, and thoughtful capital allocation should continue driving long-term shareholder value.”
Being a dividend payer, Apple Inc. (NASDAQ:AAPL) has a strong cash position. In the most recent quarter, the company reported an operating cash flow of $29 billion. It returned $32 billion to shareholders through dividends and share repurchases. The company holds a 12-year streak of consistent dividend growth, which makes it one of the best innovative stocks that pay dividends. It currently pays a quarterly dividend of $0.25 per share and has a dividend yield of 0.45%, as of September 18.
Apple Inc. (NASDAQ:AAPL) was a popular stock among elite funds during Q2 2024, as per Insider Monkey’s database. The hedge fund positions in the company jumped to 184 in Q2, from 150 in the previous quarter. The stakes owned by these hedge funds have a collective value of more than $124 billion.
