Jim Cramer’s 10 Handpicked Stocks to Watch

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Investors: 184

Apple Inc. (NASDAQ:AAPL) is set to release a new phone, which Cramer believes will be impressive. However, he questioned whether the Justice Department might argue that Apple Inc. (NASDAQ:AAPL)’s new success could give it too much bargaining power over app developers.

“On September 3rd, 2020, Apple lost $180 billion in market cap, but it soared 83% versus the S&P’s 60% gain.

Apple Inc. (NASDAQ:AAPL), is about to unveil a new phone that should be fabulous. But maybe it’ll be too fabulous for the Justice Department? They might argue that Apple’s success could give it even more bargaining power over app developers if this phone is that good. But there are plenty of strong competitors to Apple. If you don’t like Apple, you can just buy a Samsung. There’s no smartphone monopoly, so how can there be monopolistic behavior?”

In Q3 2024, Apple Inc. (NASDAQ:AAPL) achieved record revenues of $85.78 billion, a 5% increase from the previous year, driven by a strong 14% rise in services revenue, which hit an all-time high of $24.21 billion. This growth highlights the success of key services like iCloud, Apple Music, and the App Store, showcasing Apple’s resilience and ability to thrive even in challenging economic conditions.

Apple Inc. (NASDAQ:AAPL)’s net income also grew nearly 8% year-over-year to $21.45 billion, with earnings per share reaching $1.40, surpassing analysts’ expectations. Despite a slight decline in iPhone sales, Apple Inc. (NASDAQ:AAPL)’s wearables, home, and accessories segment continued to perform well, contributing $8.4 billion in revenue. Additionally, Apple Inc. (NASDAQ:AAPL)’s gross margin improved to 44.5%, reflecting effective cost management and operational efficiency.

Recent innovations, including the iPhone 15 with new features and the upcoming Vision Pro AR/VR headset, demonstrate Apple Inc. (NASDAQ:AAPL)’s ongoing commitment to technological advancement

Mar Vista Focus strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:

“Investors were reminded of the strength of the Apple Inc. (NASDAQ:AAPL) ecosystem as management demonstrated how generative AI solutions would be integrated into Apple’s 1.2 billion iPhone installed base. Apple plans to integrate generative AI features into its iOS 18, which will be broadly released in the fall with the iPhone 16. We believe Apple should benefit from generative AI as it will spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high-single-digits and low-double-digits over our investment horizon.”