We recently published a list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. Since Apple Inc. (NASDAQ:AAPL) ranks 3rd in the list, it deserves a deeper look.
Billionaire Paul Tudor Jones recently made headlines after he participated in the Robin Hood foundation’s fundraising event dressed as Neo from the movie “The Matrix.” The event raised $68.5 million. The billionaire, who founded Tudor Investment Corporation in 1980, couldn’t help himself but talk about investing during the event, and highlighted the importance of “Warren Buffett-style compounding.”
“Somewhere, somehow the multiplicative power of compound put you in this seat,” Tudor Jones said.
Paul Tudor Jones’ Recession Prediction
During an interview last year, the billionaire had predicted that a recession was expected to start in the first quarter of 2024. He said at the time that the US was in its “weakest position” since World War II. However, the market rally fueled by AI proved the prediction wrong. Earlier this year, Jones said in another interview that the financial markets represent people’s ideas and what they make of the economic situation. Paul Tudor Jones said that there’s a chance the stock market would be “here or lower” in the next five to ten years. However, the billionaire also said it’s possible that the markets would go higher from here if the next President of the US devises a better “policy response” next year.
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He’s been vocal about AI lately and sharing his thoughts about the impact of technology on our society. He thinks AI could be the “knight on the horse that rides and saves us.”
But AI-related threats worry Paul Tudor Jones. In an interview in January he referred to a survey where close to 3,000 AI experts were asked whether they believe AI would end humanity. According to Jones, a whopping 58% of the experts said yes. The billionaire said US policymakers will have to decide how to tackle this problem. Jones believes AI is growing at an “unbridled pace” since there’s so much money to be made in the domain but the biggest problem for policymakers would be to balance the benefits and threats of AI to make it sustainable.
For this article we scanned billionaire Paul Tudor Jones’ Q1 portfolio and chose his top dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Apple Inc (NASDAQ:AAPL)
Billionaire Paul Tudor Jones Q1’2024 Stake: $57,187,894
Despite having a low dividend yield, Apple Inc (NASDAQ:AAPL) is a notable dividend stock thanks to almost a decade of dividend growth and strong share upside potential amid AI-related catalysts. Bank of America recently said in a note Apple Inc’s (NASDAQ:AAPL) plans to overhaul its Siri assistant with new AI-powered features could infuse a new iPhone upgrade cycle. BofA’s Wamsi Mohan expects conversational AI to become more popular and give a boost to AI-powered phones. He has a Buy rating and $230 price target on Apple Inc (NASDAQ:AAPL).
Notable Wall Street analyst and Deepwater Asset Management Managing Partner Gene Munster recently made waves when he said in a post on Twitter that Apple Inc (NASDAQ:AAPL) is a better investment than Nvidia for the long term. Munster believes “owning Apple Inc (NASDAQ:AAPL) over the next year will have a higher return” because the market is in denial about Apple Inc.’s (NASDAQ:AAPL) AI potential. Apple Inc (NASDAQ:AAPL) is trading at 27x its 2025 EPS estimate, which is still a high multiple given Apple Inc’s (NASDAQ:AAPL) 9.60% growth estimate for 2025 and 10.50% per-annum growth expected over the next five years. But all of this could change if Apple Inc (NASDAQ:AAPL) is able to pull AI-related catalysts out of its bag. The WWDC event and the new few weeks and months would be critical for Apple Inc’s (NASDAQ:AAPL) growth trajectory.
RiverPark Large Growth Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL): Apple shares were a top detractor in the quarter. The company’s stock was pressured by negative news items including a government antitrust case, an Apple Watch patent dispute, and slowing China iPhone sales. Ultimately the company’s fiscal 1Q24 earnings report delivered a slightly better than expected quarter, but with guidance that disappointed investors. 1Q24 revenue and gross margin were better than feared, buoyed by stronger than expected worldwide iPhone sales which grew 6% despite a slight decline in China iPhone sales. Services revenue in the quarter was as expected and signaled the third quarter in a row of accelerating growth. Gross margins were also stronger than expected at 45.9%, the highest level in more than a decade. Guidance of $90 billion of revenue for 2Q24 was light however, due to weaker than expected iPhone sales in the current period and year-over-year declines in other hardware products facing difficult year-over year comps.
Although near-term trends are a bit muted, Apple is carrying lean inventory into an iPhone refresh cycle later this year. With an installed base of 2.2 billion active devices and significant growth of the company’s recurring revenue Services segment, we believe that Apple remains one of the most innovative, best positioned and most profitable companies in the mobile technology industry.”
Overall, Apple Inc. (NASDAQ:AAPL) ranks 3rd in Insider Monkey’s list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. You can visit Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones to see other stock picks of Billionaire Paul Tudor Jones. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Apple Inc. (NASDAQ:AAPL) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
