5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) the maker of the famous iPhone is one the best technology stocks to buy for the long term. It was held by 184 hedge funds in the second quarter of 2024, with total stakes worth $124.18 billion. Berkshire Hathaway is the top shareholder of the company with a position worth $84.25 billion.
It is one of the largest companies by market capitalization, which is more than $3.41 trillion as of August 23, 2024. The company has been growing its revenue by 8% and its net income by 10% during the past 10 years. The Q3 2024 of Apple Inc. (NASDAQ:AAPL) was also a success story, its revenue grew 5% year-over-year to reach $85.8 billion, whereas, its earnings per share grew 11% during the same time.
The company also achieved record revenues from its Canada, Mexico, France, the UK, Germany, India, Indonesia, the Philippines, and Thailand markets. Moreover, its service revenue also improved 14% year-over-year to reach an all-time high of $24.2 billion.
Analysts are expecting its earnings to grow by 17% during the year to reach $7, while the broader market average sits at 4%. 47 analysts have a consensus Buy rating on the stock, with their median price target of $250 presenting an upside of 11% from current levels.
Analysts are expecting that investments made in AAPL will pay off big time because of artificial intelligence. Yes, the company has been using AI for a long time as we have seen Siri as its virtual assistant, however, the company is about to scale up its AI game.
Apple Inc. (NASDAQ:AAPL) has announced plans to launch its Apple intelligence in the upcoming months. Its initial features include a new interface for Siri, the ability to rewrite content in different tones, summarize emails, and other AI accessibility features. Later, the company plans to integrate ChatGPT to further enhance its Apple intelligence for iPhone users.
Here’s the catch: The launch of Apple intelligence will only work on iPhone 15 Pro and the upcoming models thereby leading to an iPhone upgrade supercycle for the company. For context, during the most recent quarter, iPhone sales accounted for around 46% of the net sales. Thus, as expected the upgrade supercycle has the potential to substantially increase the revenue of the company and subsequently boost returns for its investors.
Baron Opportunity Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“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.”
